- 8% of investors say investment performance affects their mood a lot/a fair amount
- Another 44% say investments alter their mood a little
- Retirees, high-asset investors most likely to be affected
WASHINGTON, D.C. -- Volatility in U.S. equity markets over the past two years has not only affected many investors' portfolios but their dispositions as well, according to a Wells Fargo/Gallup survey of investors.
Two percent of U.S. investors say the performance of their investments affects their daily mood a lot, but 6% say it affects their mood a fair amount and 44% say it affects it a little. That means the slight majority, 52%, report some impact on their mood. The remaining 48% say the performance of their investments does not affect their daily mood at all.
|A lot||A fair amount||A little||Not at all|
|Performance of your investments||2||6||44||48|
|Total value of your investments||2||6||47||45|
|Wells Fargo/Gallup, Feb. 11-17, 2019|
Investors report roughly the same level of impact from the overall value of their investments. Eight percent say that number affects their daily mood a lot or a fair amount; 47% say it affects them a little; and 45% say it doesn't affect them.
These results, from a Feb. 11-17 Wells Fargo/Gallup Investor and Retirement Optimism Index survey, are based on a national sample of 1,029 U.S. investors interviewed by web via the Gallup Panel. For this survey, investors are defined as adults with $10,000 or more invested in stocks, bonds or mutual funds, either within or outside a retirement savings account.
Retirees, High-Asset Investors Most Sensitive to Market Changes
Certain subgroups of investors are more sensitive than others to changes in their portfolio. In particular, retired investors (63%) are more likely than nonretired investors (46%) to say the performance of their investments affects their mood at least a little. This includes 14% of retirees and 5% of nonretirees who say it affects them a lot or a fair amount.
Investors with $100,000 or more invested are more likely than those with less than $100,000 to report feeling affected by changes in their portfolio, 59% vs. 43%. However, there is little difference by gender.
|A lot/A Fair amount||A little||Not at all|
|Worth $100,000 or more||9||50||41|
|Worth less than $100,000||6||37||57|
|Wells Fargo/Gallup, Feb. 11-17, 2019|
The same poll asked investors whether their main goal with their investments is "to maximize growth" or "to protect from major losses." Just over six in 10 say they are focused on growth, whereas 39% say they are trying to avoid losses. The data show that investors who are focused on growth are less likely to let their portfolio affect their mood. Specifically, 45% of growth-oriented investors vs. 61% of loss-averse investors say their daily mood is affected by their investments.
Many investors make an emotional commitment along with a financial one when they invest money in the markets. This is particularly true for high-asset investors, retirees, and investors whose main goal is to preserve rather than grow their funds.
How one's investment portfolio is performing can make the difference between being able to afford a new home and perpetually renting, or between living comfortably in one's golden years and running out of money. Given this, some investors will naturally be fixated on the amount in their portfolio and feel exuberant about or deflated by the market's performance. Indeed, past Wells Fargo/Gallup research has found that retirees and high-asset investors are much more likely than their counterparts to check the stock market daily.
At the same time, prior polling also shows that three-quarters of investors are highly likely to "ride out" stock market volatility rather than sell or buy stocks. Therefore, while many investors' daily mood may be affected by how their portfolio is doing, most are adhering to conventional investing advice about taking a long view and are not acting on their feelings.
Learn more about how the Wells Fargo/Gallup Investor and Retirement Optimism Index works.