Displaying items by tag: inflation

According to a recent study by Lincoln Financial Group, market volatility is pushing Americans to refine their financial goals this year. The study revealed that 88% of Americans said they see room to improve their overall financial wellness, while 71% are likely to set financial goals in 2023. The respondents said that inflation and market volatility has made preparedness a top financial priority. For instance, 56% said protection from risk is most important to them, 39% said their greatest money goal is protecting their family, and 26% said guarding their income was a top priority. While data is showing that inflation is beginning to slow, there are still real concerns over whether the U.S. economy could enter a recession this year. This has investors nervous. David Berkowitz, Lincoln Financial Network president, said the following in a statement, "Our research reinforced the importance of financial solutions that can help consumers navigate through market cycles and protect their loved ones. People are not only concerned about having enough to pay their bills, but also saving for retirement and preparing for the unexpected.” For example, 40% of respondents said that financial protection meant being able to comfortably pay for basic living.

Finsum:A recent study by Lincoln Financial revealed that market volatility and inflation are pushing a majority of investors to set financial goals this year to navigate the market uncertainty.

According to industry group Nareit, REITs are well-positioned to navigate economic and market uncertainty in 2023 due to strong operational performance and balance sheets. As part of their 2023 REIT Outlook, the firm wrote, “despite economic headwinds and weakness in valuations, equity REITs have proven to be quite resilient from an operational perspective, and it is clear that REITs are well-positioned for ongoing economic uncertainty in 2023.” The firm noted that data from the Nareit T-Tracker in the third quarter of 2022 highlighted solid year-over-year growth in funds from operations (FFO), net operating income (NOI), and same-store NOI. Quarterly FFO increased to $19.9 billion in the third quarter, a 14.9% increase from a year ago and an all-time high. While the pandemic took a toll on the operational performance of equity REITs, there’s no question that it has recovered and surpassed pre-pandemic levels. Nareit also noted how REITs historically perform during and after a recession. For example, REITs have historically outperformed private real estate during a recession and in the four quarters after a recession. REITs have also historically outperformed their equity market counterpart before, during, and after recessions.

Finsum:Based on Nareit's 2023 outlook, REITs are well-positioned to navigate market uncertainty and a potential recession due to strong operational performance.

Inflation? Well, here’s some breaking news – even if CNN’s come to frown upon them lately: it’s still hitting nosebleed levels, according to gsam.com. What’s more, the wider economic environment, and the labor market, especially, has strutted its mettle.

Yeah; wow. Maybe – just maybe – the network will reconsider its spanking new policy.

In any event, it means the central banks will continue to rachet up rates. The question then becomes that since monetary policy impacts the economy with a lag, will they head north too far and quickly. From GSAM’s perspective, market stabilization will demand signs of inflation topping out, not to mention hawkishness and real yields.

”Higher inflation and higher growth volatility are propelling us into a higher yield environment, marking a departure from the post-financial crisis era,’ said Whitney Watson, global head of Fixed Income Portfolio Management, Construction & Risk at Goldman Sachs Asset Management. “Ultimately, we think this presents opportunities in high-quality fixed income assets, such as investment grade corporate bonds and agency MBS.”

Meantime, it seems bonds will be back in vogue with investors next year, according to schwab.com.

And it’s a real change of pace. Following subpar yields stretching years, and in the aftermath of the extremely hard knocks endured by prices in 2022, a bounce back appears to be in store in the fixed income markets.

According to a new report by Edelman Financial Engines, inflation, recessionary fears, and geopolitical uncertainty are undermining financial confidence. The report found that just 23% of more than 2,000 adults that were polled earlier this fall felt “very comfortable” about their finances and only 12% consider themselves wealthy. Even high-net-worth investors are concerned about their finances. Only 44% of millionaires feel “very comfortable” about their finances, with only 29% feeling wealthy. Jason Van de Loo, head of wealth planning and marketing at Edelman Financial Engines, had this to say about the results, “Becoming a millionaire was always the pinnacle of financial success. But at a time when inflation and stress levels are up, and markets and portfolios are down, very few Americans actually feel wealthy.” Edelman Financial Engines also found that most adults feel less financially secure than they would have hoped at this stage in their life. The results match similar responses from other surveys. A separate report by Bank of America found that 71% of workers feel their pay isn’t keeping up with the rising cost of living which brings the number of people who feel financially secure to a five-year low.

Finsum:A poll conducted by Edelman Financial Engines revealed that Americans are less confident about their finances due to inflation and recessionary concerns.

According to a recent survey of active retail investors conducted by Opinium on behalf of Lansons, educating affluent investors on alternatives could lead to huge inflows. Lansons, a leading independent reputation management consultancy, partnered with strategic insights agency Opinium to conduct a nationally representative survey of 1,832 Americans. The survey found that a majority of Americans are unfamiliar with digital platforms that offer access to alternatives. Eighty percent have either never heard of these platforms or don’t know much about them. However, educating these investors could be the key to unlocking massive inflows as investors are certainly open to investing in them. Based on the results of the survey, 20% of Americans would strongly consider investing in alternatives and 7 percent are already planning to do so. In addition, active investors would be willing to allocate 25% of their portfolios, on average, to alternatives. These figures represent more than $1.3 trillion in potential investment. In addition, the current market conditions could provide an opportunity for the industry to educate investors about alternatives as nearly half (47%) of the survey respondents expressed extreme concern about the impact of inflation on their investments. Alternatives such as gold and real estate are generally considered hedges against inflation.

Finsum:If a lack of knowledge on alternative investing could be remedied, alternatives could see massive inflows.