Drazen Zigic / Shutterstock.com
It’s a scary time to have money in the stock market — especially if you believe we’re in a recession. And that’s reflected in the questions Americans are asking their financial advisors.
The 2024 Trends in Investing Survey from the Journal of Financial Planning and the Financial Planning Association offers a look at common concerns raised by people working with financial planners. More than 200 planners who provide investment advice responded to the survey, and data was gathered in March and April 2024.
Here’s a look at investors’ top worries, according to financial advisors.
1. Impact of interest rates
Financial advisors with clients who inquired about this: 75%
It’s small wonder interest rates are a popular topic to bring up with financial pros. They affect all kinds of financial decisions, including investments, credit card interest rates and the cost of mortgages. And they’ve remained stubbornly high as the Federal Reserve attempts to slow inflation.
2. Effects of inflation
Financial advisors with clients who inquired about this: 74%
Inflation is an ongoing major concern, with various types of groceries seeing as much as 19.5% inflation over the past year.
Unfortunately, inflation affects more than your budget, too. It’s often bad news for the stock market when something unusual happens — like persistently high inflation. As we explain in “12 Tips for Surviving a Volatile Stock Market,” Wall Street hates uncertainty.
3. Effects of volatility
Financial advisors with clients who inquired about this: 62%
Speaking of uncertainty, the third-most-frequent concern for investors is the effect of volatility on a portfolio. When the market becomes erratic, it can be hard to tell what you should do about it — especially if your own emotions are running high.
In times like this, it might be wise to turn to the advice of one of the most successful investors ever — Warren Buffett.
4. Fees
Financial advisors with clients who inquired about this: 42%
At a time when investors are particularly sensitive to increased costs, it’s no wonder so many people are asking their financial advisors about fees.
If you think you are paying too much for your investment advice, stop by the Money Talks News Solutions Center and learn how to find the perfect financial advisor.
5. Effects of tax reform
Financial advisors with clients who inquired about this: 35%
Changes to tax law are always a concern among investors. That’s understandable since they could have a dramatic effect on your retirement plans.
6. Investing in cryptocurrencies
Financial advisors with clients who inquired about this: 34%
Cryptocurrency and “meme stocks” like GameStop had a big moment in 2021. These ultra-speculative investments have continued to capture interest since then, although many people still don’t know whether they’re a worthwhile place to put money.
If you’re interested in learning more, here’s “Everything You Want to Know About Crypto But Were Afraid to Ask.”
7. Effects of the Secure 2.0 Act
Financial advisors with clients who inquired about this: 27%
The Setting Every Community Up for Retirement Enhancement Act of 2019, more often simply called the SECURE Act, made significant changes to rules for retirement accounts — including raising the age when retirees have to start withdrawing money.
A follow-up law passed in 2022 known as the Secure 2.0 Act set up even more changes. Those changes don’t all happen at once, which leaves investors with questions and financial advisors with plenty of work.
8. Socially responsible investing (ESG)
Financial advisors with clients who inquired about this: 24%
One growing investment trend is “environmental, social and governance investing.” Known as ESG, it’s the idea that you can pour money into huge companies while still trusting them not to take profit-enhancing shortcuts that harm people or the planet. More than $30 trillion was invested in ESG-focused funds as of 2022, according to Bloomberg.
Money Talks News founder Stacy Johnson has hosted a podcast discussing whether ESG is a positive change or simply hype marketing.
9. Direct indexing
Financial advisors with clients who inquired about this: 7%
Direct indexing is essentially the idea that a mutual fund or an exchange-traded fund can be a DIY project. In other words, some investors think they can match or beat the performance of popular index funds by individually buying stocks.
“Having to buy a relatively large number of individual stocks that make up an index, in the percentage needed to replicate its performance, has traditionally been an impediment for most investors to use this strategy,” Fidelity explains.
Fractional shares — allowing you to buy a small piece of a popular and expensive investment — have made this approach easier, especially with the help of apps like Robinhood and Fundrise.
10. Investing in cannabis
Financial advisors with clients who inquired about this: 3%
While no longer as hot a topic as cryptocurrency, many people view the increasing legalization of the budding cannabis industry as an investment opportunity. States also see it as a tax revenue opportunity.
Money Talks News Founder discusses this type of investment in “Ask Stacy: Should I Invest in Marijuana Companies?“
Get smarter with your money!
Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.
Read the full article here
