How Your Peers Are Managing Their Money – Survey Results

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Four weeks ago we had our newsletter subscribers participate in a survey and promised to share the results along with our thoughts on what they mean. Well the results are in and there are some interesting insights into what it means for you and your peers as you manage your money.

We recognize that the data is not a perfect representation of investors as a whole.  Our subscribers are definitely a wealthier, more educated and more sophisticated slice of the population. Those subscribers who chose to participate may slant one way or another compared to those who chose not to. And finally, to keep it short and anonymous we didn’t get much of the detail that would have given even more insight into investor behavior.

That said, below are the survey results and some of our thoughts on what they may mean for you as you consider your investments and those of your peers.

What is your expectedtimeline to retirement?

The responses to this question reiterate one of the most common themes of investors everywhere. People don’t engage with their retirement as early as they should. Decisions made when young will usually have a far greater impact on your retirement than those made when you are nearing it.

Yes, the money you make is often less when young, and psychologically we feel far removed from the reality of retirement. Whether it is that our subscribers as a whole are closer to retirement, those who chose to respond are closer or something else, it was very clear that the level of engagement and interest in the data from the survey was far higher for those closer to or already in retirement.

Takeaway: If you are young and just starting out get engaged with your retirement planning now. If you are closer to or in retirement tell every younger friend you know the wisdom you have now – plan for retirement while young.

Which of the following asset classes in your portfolio has the highest dollar value?

We’re thrilled to see that most of our respondents understood that equities are so crucial to their portfolios. It was even interesting to note that the majority of those who are in the “Currently retired” category had the largest portion of their assets in equities.

Even when in retirement your investment timeline should very often justify a substantial allocation to equities. We recommend you speak with a qualified financial advisor to make that decision.

How much would you estimate your net worth to be?

We were not surprised here. We have always known that our subscribers had a fairly diverse (but skewed towards the more wealthy) wealth base with a variety of income and wealth levels.

How do you feel about the current economic outlook for investors over the next year?

This was exciting to see for a couple of reasons, the first obviously being that there is a general positive outlook for the coming year.

The second reason is that we know our subscribers are more often strong contributors to the market as entrepreneurs, managers, engineers and those who have a strong insight both into how the economy should be doing but also into what it takes to make that happen.

Which matters more to you regarding your portfolio?

Very interesting to see that not only was there a fairly even split between growth and stability but it was not dramatically different across retirement time frames. There were many who saw that even though they were into retirement it was important to consider that growth was a more important requirement from their portfolio than stability.

We assume that this is because they know their time frame beyond retirement is sufficiently long to justify the volatility that comes with growth.

How well planned out do you consider your financial future to be?

We were glad to see that not one respondent considered their financial future to be “completely unplanned.”  However, we encourage those who are not in the “very well planned” category to take the time to get there. The actual financial benefits for the future plus the psychological benefit of removing some uncertainty are both strong reasons to make planning your future well a priority. (I’m anxiously waiting for a call from those of you looking to make that happen 😉  ).

How much confidence do you have that you will realize your financial goals?

There was no big surprise here that there was a very strong correlation between the degree to which respondents thought their financial future was “well planned” and how confident they were in achieving their financial goals. This suggests that you really can see the improvement in the probability of achieving your goals when your plan has sufficient effort behind it.

We were also happy to see that not a single respondent selected that they “would most likely not” achieve their financial goals. Probably has to do with the type of audience that is subscribed to our newsletter but good to see nonetheless.

The response was so strong to this survey that we will very likely carry the tradition forward in either a quarterly survey that gives insight into other areas of investment behavior across our subscribers or at least doing an annual survey to see how the results on this particular survey change over time.

A Final Request

If you’re reading this you certainly have a strong interest in your financial future. You consider it of importance and want to improve it. You might be one of our subscribers who have not yet taken the chance to have a simple and easy Iron Gate portfolio assessment. You’ve heard it before but we strongly believe that you will be enlightened by what it shows you whether you choose to invest with us or not.

Here’s to wise investing,

Brett Pattison

 

What We’re Reading

Two Simple Ways to Trounce the Market: While we don’t like the title of this article (beating the market is not a simple task), we do like the content. Chris Mayer discusses two simple things Warren Buffett has done over time in the Berkshire portfolio. We try to implement these same things in our portfolios as well.

4 Signs of a Bubble: A question we often get from clients is “how do you know when a bear market is coming?” Our answer is very simple, “we don’t know for sure, no one does. What we do know is when we see bubbles forming, it’s time to be cautious.” This article discusses the 4 Signs of a spotting those bubbles wrapped in euphoria.

Stock Picking is Dying Because There are No More Stocks to Pick: This article is pretty fascinating. The number of publicly traded companies in 1997 were 7,355. Today there are fewer than 3,600. Two things come to our mind after reading this. 1) The bulk of companies are privately held, and it’s important to have a strategy in place to invest in those privately held companies, and 2) It’s hard to be a stock picker these days, but well worth picking stocks if you’re good at it!

Disclosures: All investments have inherent risks. There can be no assurance that the investment strategy proposed will obtain its goal. Past performance does not guarantee future results. Options contain risk that may result in the loss exceeding the original investment. Do not trade options until you talk with a financial professional and understand the risk.

Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax or legal advice. Although the information has been gathered from sources believed to be reliable, Iron Gate Global Advisors does not guarantee its accuracy or completeness. Please note that individual situations can vary, therefore, the information should be considered when coordinated with individual professional advice. Investors should be aware that there are risks inherent in all investments, such as fluctuations in investment principal and the potential loss of principal.

Neither the information in this document nor any option expressed herein constitutes an offer to sell or solicit any person to purchase any security. Investment decisions should not be made based on information in this document. Individuals should rely exclusively on the offering material when considering whether to invest.

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Categories: Markets and Personal Finance.