October 29, 2013 (PLANSPONSOR.com) – U.S. workers hold almost half of their investable assets in low- or no-return cash strategies, potentially jeopardizing retirement readiness in an effort to avoid risk.
Many investors are still uncomfortable taking on more risk
to achieve better returns following the 2008 to 2009 financial crisis,
according to BlackRock’s first Global Investor Pulse Survey. Those ongoing
worries have caused U.S. investors at all income levels to keep 48% of
investable assets in cash or cash-like securities, leaving just 18% for stocks
and 7% in bonds.
The results reflect a global investment environment still
“plagued by uncertainty, policy confusion and political dysfunction,” survey
Also telling is the 50% of affluent investors who feel
income-generating investments are riskier today than five years ago. The same
percentage of affluent investors said they were not knowledgeable about the
best ways to generate income in today’s markets.
Other factors driving assets into low- or no-return cash
investments are high personal debt and bill payments, according to the survey.
The 49% of take-home pay devoted to living costs and personal debt is
particularly high in the U.S. when compared to the 40% global average.
They survey also found Americans saving 16% of their pay
each month, compared to the 18% measured globally. When asked what would
encourage investment of cash savings, nearly one in three (32%) survey
respondents indicated “less personal debt.”
In terms of worries moving forward, U.S. retirement savers
said health care costs, job security, and the state of the wider U.S. economy
topped the list.
More on the survey and its methodology can be