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We conducted a survey asking 2,000 US investors which geopolitical or economic event they felt was most concerning regarding the health and security of their investment portfolio. For the survey, we targeted males and females between the ages of 35 to 65+ from coast to coast. The survey results were deemed statistically significant by Google Surveys, with an RMSE Score of 3.9%. We asked participants the following question with several possible responses:
Which current geopolitical or economic event are you most worried about when it comes to the health of your investment portfolio (401k, IRA, etc.)?
- US-China trade war
- Increasing national debt
- Fed’s interest rate cuts
- Hong Kong – China tensions
- Persian Gulf tensions
- Kashmir annexation (India/Pakistan tensions)
American Investors Are Most Concerned About The US-China Trade War, Especially 35 to 44-Year-Olds
The overwhelming concern amongst American investors who responded to the survey with regards to the health of their portfolio is the increasing tensions of the US-China trade war. A full 45.8% of all respondents indicated that this was what they were most worried about.
When demographic filters were applied to the results factoring specifically 35 to 44 years old, the percentage increased to 47.6%, and even further to 48.2% with males of that age bracket.
The fact that nearly half of all respondents to the survey sighted the US-China trade war as the primary concern for the direct effects on investment portfolios, comes as little surprise. Over the past couple of weeks, financial markets have endured a roller coaster ride specifically attributed to uncertainties surrounding the escalating trade war between the two countries. The general consensus amongst analysts is the market volatility will continue until the trade war ceases between the US and China.
The Increasing National Debt Is Most Worrying To Female Investors Between 55 And 64
The second most popular response to the survey was the increasing national debt, with 27.3% of respondents stating this answer.
Yet, when demographic filters were applied to the results, some compelling insights were revealed. The percentage increased to 29.1% with those approaching retirement age between 55 and 64. When focused specifically on females within this demographic, the percentage skyrocketed to 34.1%. Therefore more than a third of all female respondents approaching retirement are most concerned about the effects of the increasing national debt held by the public on their investment portfolio.
The survey results are unsurprising, considering the figures released by the Congressional Budget Office (CBO) on August 21st. According to CBO projections, the US national debt held by the public is growing faster than anticipated and will reach $1 trillion by 2020. Moreover, the CBO predicts that the deficit will increase even further each year to 2023. Consequently, an increasing number of conservative groups have been pushing Congress to cut future deficits by reducing retirement programs and federal health care such as Social Security and Medicare. Likewise, many Republicans believe curtailing mandatory federal spending on such programs is imperative.
The Fed’s Interest Rate Cuts Are A Worry For American Investors
Another group of respondents to the survey, 11% stated that the Fed’s interest rate cuts worried them most when it came to the health of their investment portfolio.
In July, the Fed cut interest rates for the first time since 2008, in an attempt to stave off the chance of an economic downturn. Just last week, Federal Reserve Chair Jerome Powell indicated that there is a possibility for another rate cut in September, citing the increased global economic upheaval over the past month as the impetus.
Hong Kong–China Tensions Are A Concern For Those 65+
The fourth most popular response amongst respondents to the survey was the tensions between Hong Kong and China. 8.4% of respondents indicated that they worried most about the effects of the escalating tensions pertaining to the Hong Kong protests on the health of their investment portfolio.
Interestingly, when demographic filters were applied specifically to those 65+, the percentage increased to 9.5%, thus, making this the third most popular response with the 65+ demographic.
The tensions between Hong Kong and China stem from protests that commenced in early June, where protestors opposed the now-suspended extradition bill. This legislation would have permitted the Chinese government to extradite Hong Kong suspects to face trial in mainland China. The protests have now evolved to vocalize concerns that China is gradually eliminating the rights of the residents in Hong Kong.
Persian Gulf Tensions Are A Concern For Male American Investors Who Are 55 to 64 Years Old
Another smaller, albeit still important group, 4.8%, indicated that the increasing tensions in the Persian Gulf are concerning with regards to the wellbeing of their investment portfolios.
Interestingly, when demographic filters are applied to the survey results, factoring specifically males between 55 and 64, the percentage leaps to 8.7%, almost doubling. This compelling insight could be explained by the fact that males within this age bracket potentially have invested more heavily in oil, than any of the other demographics.
Tensions in the Persian Gulf have increased between Iran and Britain over the past month or so. British forces seized an Iranian oil tanker in near Gibraltar (a British Overseas Territory) citing that it violated sanctions against Syria. Consequently, Iran retaliated by seizing a British tanker in the Strait of Hormuz, which provides strategic sea passage between the Persian Gulf and the Gulf of Oman. On August 24th, Britain sent a third warship to the Persian Gulf, further escalating tensions in the region.
The Kashmir Annexation Is Less of Concern, but Still Worrisome, Especially to Males Over 65
The mounting tensions between India and Pakistan were the final geopolitical event that concerned American investors when it came to the health of their investment portfolio. 2.7% of respondents indicated that the Kashmir annexation was of greatest concern for them, with regards to the effects of the crisis on the portfolio.
Curiously, when demographic filters were applied specifically to males over 65, the percentage increased to 5.9%, more than doubling from the general results. Therefore, amongst this demographic, the Kashmir annexation was the fifth most popular response.
The tensions between India and Pakistan originated on August 5, when India suddenly revoked the Kashmir’s autonomous status after seven decades. The Indian-governed territory of “Jammu and Kashmir”, the Pakistani-governed territories of “Azad Kashmir” and “Gilgit-Baltistan”, and the Chinese-governed territories of “Aksai Chin” and the “Trans-Karakoram Tract” designate the region. In the subsequent weeks, the region has experienced ongoing violent protests opposing India’s decision and political unrest as Indian authorities crackdown on Kashmir political parties.
Geopolitical and domestic economic events, coupled with global economic turmoil all have direct effects on the health of any investment portfolio. During times of market volatility, there are diversification strategies that can be utilized to best investments including your 401k, IRA, et al. As always, remember to do your due diligence before investing. Geopolitical events and economic upheaval can be ridden out.
Details About The Study And RMS Score