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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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The Conservative Investor: Wave of the Future?

The current economic environment is bringing out the conservative investor in many of us. What factors are driving this trend?

| BY Adriana Reyneri


Individuals are three times more likely to be conservative investors in the current economic environment than they are to take an aggressive stance, according to a survey of more than 1,100 investors conducted in February by Millionaire Corner. Age and retirement status are key influencers in this trend.

Ten percent of all investors participating in the survey say they plan to be more aggressive – placing more of their investments at risk in the quest for higher returns. These risk takers are outnumbered three-to-one. Thirty percent of survey participants say they plan to invest more conservatively, seeking stable returns and putting limited portions of their investments at risk.

The large majority – 60 percent – do not plan to become either more a aggressive or more conservative investor in the current economic environment, characterized by modest growth as the economic continues its slow expansion. The job outlook is improving, while the housing and financial sectors appear to be stabilizing, according to the Federal Reserve Beige Book released yesterday. The Fed predicts a positive short-term outlook for consumer spending, which accounts for 70 percent of the nation’s Gross Domestic Product or GDP.

Concerns with the Greek debt crisis and global recession, as well as worries about the U.S. political climate, appear to be outweighing positive news about the U.S. economy, as Americans evaluate their tolerance for investment risk, but attitudes vary with age and retirement status.

Working Americans appear the most likely to make conservative investment decisions that reflect deep concerns about saving enough money for retirement. One-third of investors participating in employer-sponsored 401(k) retirement plans say they plan to invest more conservatively in the current economic environment.

Younger investors, who have decades until they reach traditional retirement age, appear more likely to make aggressive financial moves. More than one-fourth says they will be more aggressive in the current economic environment, yet a slightly high share – about 28 percent) say they will be more conservative.

Investors staring retirement in the face – those ages 51 to 60 – are the least likely to be aggressive and put their assets at risk. Only 8 percent say they will be more aggressive, while more than one-third plans to be a more conservative investor.  

These changing risk tolerances reflect the differing concerns of younger and older investors. Those 40 and younger worry primarily about their job security and reducing personal debt levels and saving, according to our February survey, while retirement security ranks fourth on their list of concerns. Investors in their 50s list “adequate retirement savings” as their “most significant” financial concern and this, in turn, translates into the likelihood of becoming a more conservative investor.