Risk Loses Appeal for Investors

The current economic climate has curbed many investors’ appetites for risk, according to a survey released by TD Ameritrade Holding Corporation.

When asked what, if any, changes they made to the way they’ve invested in the markets over the past six months, about a third of investors surveyed (34%) said they had taken on less risk, compared with 22% who answered the same just three months ago.

Optimism about investing conditions in the stock market is dropping. For a three-month outlook, 47% of those surveyed called their outlook optimistic, compared with 66% who said the same in April.

Investors expressed regret over the way they managed their money in the past. If they could push back the clock to before the recession of 2008-09, many investors said they would have managed their money differently. Some would have spent less and saved more (71%); others said they would have lived within their means (65%); other investors said they would have taken more personal responsibility for managing their money (60%).

In a possible attempt to ease regrets, investors continued to feed their retirement accounts. Most said they contributed the same amount as usual or more to their IRA over the past six months (86%).

Retail investors are uneasy about the slow economic recovery, and the ramifications of the European debt crisis on global and domestic economies, according to Tom Bradley, president of retail distribution, TD Ameritrade. “Despite the bearish sentiment, our clients continue to monitor accounts at levels similar to last year, but they’re waiting for a little more clarity on key issues before they completely engage, “Bradley said.

The survey was conducted online by Research Now on behalf of TD Ameritrade from June 27 to July 9. The participants were 1,035 investors who offered their views on economic conditions and outlook for the market in general. Investors have at least $10,000 in investable assets, own securities in brokerage accounts, are 18 years or older, are involved in managing their portfolios, and have traded securities at least once in the past 12 months.

The complete survey can be downloaded here.