2 Cardinal Sins Threaten Your Nest Egg

Retirement could be rougher for many people than they expect, judging by investing trends.

Investors are making two critical mistakes these days, according to the latest annual Schroders Global Investor Study, released Wednesday. As a result, these investors could find themselves short-changed in retirement.

Gavin Ralston, Schroders’ head of thought leadership, says of the findings:

“The survey showed that getting back the money invested and getting a return higher than inflation are what is most important to investors. However, investors’ short-term outlook and unrealistically high return expectations raise concerns that investors could be left disappointed.”

Schroders is an international asset management firm focused on long-term approaches to investing.

For its latest study, it polled 20,000 investors across 28 countries.

Unrealistic expectations

Worldwide, investors expect to earn 9.1 percent — a “significantly inflated” rate of return, Schroders says. In the Americas, investors expect 10.4 percent.

However, the study notes that stock returns worldwide are projected to be more modest over the next 12 months, and that “with many countries’ interest rates at historic lows, plenty of investors look set to be disappointed.”

Short-term thinking

Worldwide, investors expect to hold on to investments for 3.2 years on average.

Only 18 percent of investors hold investments for at least five years, which Schroders — like Money Talks News founder Stacy Johnson — considers the minimum.

As he explains investing in “Ask Stacy: Do I Need a Financial Adviser, or Can I Manage My Money Myself?“:

Step one: Decide how much he can put into long-term savings. Long-term means money he definitely, positively won’t need for at least five years.

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