It’s been one of the toughest starts in stock market history in 2022, and the economic turmoil has had Americans reacting in many ways, according to a Bankrate survey. Fewer than one in five (18%) American adults with a retirement or investment account say they will invest more in 2022 than they did in 2021. And many investors say they deliberately take no action.
A total of 56% of US investors said they intentionally did nothing in response to market volatility. Similarly, about 62% of respondents said they intentionally did nothing about their investments due to high inflation.
But younger investors are much more likely to say they will increase their investments this year, compared to last year. More than 43% of Gen Z (ages 18-25) say they will add “a lot more” or “a little more” to their investments in 2022. Meanwhile, only about 8% of Baby Boomers ( ages 58-76) say they will add more to their investment accounts in 2022.
“Gen Z and millennial investors ready to invest more in equities this year, despite market volatility and inflation, may see greater long-term rewards for the discipline to hang on and hold on. ‘buy more at lower prices,’ says Greg McBride, CFA, Bankrate’s chief financial analyst.
Bankrate surveyed 3,658 American adults about their investments, revealing these key findings.
Key points to remember:
Most U.S. investors intentionally did nothing in response to rising stock market volatility or inflation
Both inflation and volatility have reached extremes in 2022, but many consumers say they are intentionally leaving their investments untouched in response to these concerns.
In response to market volatility:
- More than half (56%) of equity investors said they had deliberately taken no action so far in 2022.
- About 14% said they bought more stocks this year.
- Nearly 16% said they had sold shares or withheld new contributions from them in 2022.
- Nearly 15% of respondents said they were unaware of the increased volatility in the stock market.
With inflation near multi-decade highs – a blistering 8.3% in the April 2022 report – many Americans have decided to simply stay the course with their investments.
In response to high inflation:
- A strong majority (nearly 62%) of equity investors said they intentionally made no changes to their portfolio.
- More than 13% said they contributed more to their equity-linked investments.
- About 14% said they had withdrawn money from their stock investments or refrained from buying more.
- Nearly 11% said they were unaware of higher inflation.
At 18%, the number of investors planning to invest more and those planning to invest less is evenly split
And how much do Americans plan to invest in 2022 versus 2021?
Although most Americans invest the same way, it’s actually neck and neck between those who say they will invest more this year (18%) and those who say they will invest less (18% ).
To break it down, around 5% said they would invest “a lot more” in 2022, while around 13% said they would invest “a little more” this year.
Of those investing less, more than 9% said they would add “a little less” to their accounts in 2022, while more than 8% said they would contribute “a lot less” than in 2021. (These figures amount to nearly 18% in total.)
Just over half (52%) said they would invest the same amount in 2022 as last year, while 13% said they were unsure how much they would invest.
Young investors are more likely to make active moves to their investment accounts in 2022
Age played a role in Americans’ decision to actively invest in their stock accounts this year. Younger investors said they were more likely to make moves in response to inflation or volatility, while older investors tended to make fewer moves.
- About 73% of Gen Z respondents (aged 18-25) said they actively bought, sold, or withheld additional investments due to market volatility or high inflation in 2022.
- More than 46% of millennials (aged 26-41) said they have actively adjusted their portfolios.
- Only 28% of Gen Xers (aged 42-57) said they actively invested their accounts.
- More than 25% of baby boomers (aged 58-76) said they had bought, sold or withheld money from investments this year.
On the other hand, older investors were likely to deliberately do nothing in response to inflation and volatility.
- Nearly 64% of baby boomers said they intentionally made no investments in response to inflation and volatility.
- About 56% of Gen Xers said they hadn’t budged.
- Exactly 36% of millennials said they made no changes to their investments.
- Only 14% of Gen Zers said they deliberately made no changes to their investments in response to inflation and volatility.
But when asked what they’ll be doing in 2022 (and not just what they’ve already done), young investors are much more likely to say they’ll put more into stocks this year, rather than less. , compared to last year.
- More than 43% of Gen Z say they will invest more in 2022 than in 2021, compared to around 18% who say they will invest less this year.
- More than 27% of millennials say they will invest more this year, while around 14% say they will invest less.
- Around 14% of Gen Xers say they will invest more in 2022, compared to around 16% who say they will invest less.
- Meanwhile, about 8% of baby boomers say they will invest more this year, while about 22% say they will invest less in stocks.
“Boomers are nearly three times more likely to invest less in stocks this year, rather than more, compared to last year, but that’s entirely consistent with the reduction in portfolio risk as whether retirement looms, begins or continues, regardless of the overall market environment,” McBride says.
Men were more likely to actively invest than women
According to the Bankrate survey, an investor’s likelihood of making active investments also appears to be gender-related.
Nearly 40% of men said they were active investors — either moving money in, out of, or deliberately withholding additional contributions to stocks — in response to increased market volatility or inflation higher. By comparison, about 31% of women said the same.
Men were also more likely to say (21%) that they plan to invest more in stocks this year than women to say the same (14%). Women were more likely to say (16%) that they didn’t know if they would invest more than men (10%).
Highly educated investors were likely to intentionally do nothing in response to the deteriorating economic climate
Investors with more education were more likely to stick with their investments than those with less education. More than 62% of those with a college education and 54% of those with a four-year degree said they deliberately took no action in response to inflation or market volatility. This compares to more than 46% of those with a college education and 41% of high school graduates and those without a high school diploma.
Those with higher levels of education were not as likely to sell or withhold contributions as those with less education. About 15% of those with a college education and 16% of those with a four-year degree said they sold or withheld contributions to investment accounts in response to volatility or inflation. This compares to 23% of those with a college education and 27% of those with a high school diploma or less.
Greater education was also correlated with the amount investors said they would invest in stocks this year compared to last year. More than 62% of graduates and nearly 56% of those with a four-year degree said they would invest the same amount in stocks this year as they did last. By comparison, about 48% of those with a college education and 44% of those with a high school diploma or less said they would invest the same amount as last year.
Low-income investors were more likely to move their money in response to the economic climate
Americans with the lowest incomes were more likely than those with higher incomes to withdraw money from stocks or withhold additional investments due to market volatility.
- More than 23% of households with an income of less than $50,000 per year reported having done so.
- Nearly 14% of households with incomes between $50,000 and $79,999 did so.
- About 17% of households with incomes between $80,000 and $99,999 did.
- Nearly 15% of households with income over $100,000 said they withdrew money from stocks or withheld additional investments due to market volatility.
Americans in the lowest income group were also the most likely to be active investors due to inflation, either buying, selling or withholding additional investments due to this factor.
- Nearly 40% of households with incomes below $50,000 a year said they made these changes in 2022 in response to inflation.
- Almost 23% of households with incomes between $50,000 and $79,999 did so.
- About 28% of households with incomes between $80,000 and $99,999 did.
- Nearly 27% of households with an income over $100,000 did so.
This study was conducted for Bankrate via a telephone interview by YouGov. Interviews were conducted April 19-22, 2022 with a sample of 3,658 U.S. adults. The data is weighted and is intended to be representative of all US adults, and is therefore subject to statistical errors commonly associated with sample-based information.