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BofA: Small Investors Have Grown More Cautious

Middle-class investors, burned by the financial crisis and worn down by recession, have grown even more conservative and risk-averse in the past year, according to a Bank of America survey.

About four out of 10 "mass affluent" Americans -- those with $50,000 to $250,000 to invest -- told the bank they are more conservative than they were a year ago. These investors are putting more of their investment and retirement accounts into cash or fixed-income investments.

Nearly half of respondents said they were "conservative" or "very conservative" in terms of their tolerance of market risk, while 35 percent described themselves as "moderate." One in five respondents has begun putting more money aside in savings in the last year, while 31 percent reduced spending.

Even so, more than half of the respondents said their financial situation has held steady. One in four say their financial picture has improved, according to 1,000 respondents from across the United States, reached by phone this month.

One reason why more Americans said they feel better about things is that they are paying down debt, cutting back on spending and watching their pennies more carefully to reflect their worries about the economy.

"They see a consistent, if not great, growth scenario and they're adjusting," said BofA's Dean Athanasia, whose job includes oversight of Merrill Edge, a program offering brokerage services through call centers and the Internet to people who aren't rich enough to get personal service from a Merrill broker.

The survey echoes many of the same concerns listed by Merrill's pool of affluent Americans -- those with $250,000 to $10 million to invest -- such as health-care costs, savings enough for retirement and whether they can sustain their standard of living after they stop working.

But those concerns and worries are more pronounced among less affluent investors, BofA said.

© 2015 Thomson/Reuters. All rights reserved.

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Middle-class investors, burned by the financial crisis and worn down by recession, have grown even more conservative and risk-averse in the past year, according to a Bank of America survey. About four out of 10 mass affluent Americans -- those with $50,000 to $250,000 to...
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