What Investors Are Most Worried About, According to Financial Advisers

It’s a scary time to have money in the stock market — moreso than usual. And that’s reflected in the questions Americans are asking their financial advisers.

The 2022 Trends in Investing Survey from the Journal of Financial Planning and the Financial Planning Association offers a look at common concerns raised by people working with financial planners. More than 400 planners who provide investment advice responded to the survey, and data was gathered in February and March 2022.

Here’s a look at investors’ top worries, according to financial advisers.

1. Effects of inflation

Financial advisers with clients who inquired about this: 66%

Unsurprisingly, the top recent concern of investors is the rate of inflation, which has put the cost of some things at a 40-year high.

Inflation affects more than your budget though. It’s often bad news for the stock market when something unusual happens. As we explain in “12 Tips for Surviving a Volatile Stock Market,” Wall Street hates uncertainty.

2. Effects of volatility

Financial advisers with clients who inquired about this: 54%

Speaking of uncertainty, the second-most-frequent concern for investors is the effect of volatility on a portfolio. When the market becomes erratic, it can be hard to tell what you should do about it — especially if your own emotions are running high.

In times like this, it might be wise to turn to the advice of one of the most successful investors ever — Warren Buffett.

3. The pandemic

Financial advisers with clients who inquired about this: 47%

While the pandemic is slowly receding as a financial concern, it certainly hasn’t gone away, and its impacts are likely to be felt for years. In many ways, COVID-19 changed how we think about money.

4. Cryptocurrency investments

Financial advisers with clients who inquired about this: 47%

Cryptocurrency and “meme stocks” like GameStop had a big moment in 2021. Now, these ultra-speculative investments are having another moment — and not a good one.

Bitcoin and Ether, two of the most popular cryptocurrencies, lost more than 35% of their value in just one week of June, according to CNBC.

5. Tax reform

Financial advisers with clients who inquired about this: 43%

Changes to tax law are always a concern among investors. That’s understandable since they could have a dramatic effect on your retirement plans.

President Joe Biden’s tax proposals last year were a signal to “9 Groups Who Should Brace for Higher Income Taxes.”

6. The SECURE Act

Financial advisers with clients who inquired about this: 32%

The Setting Every Community Up for Retirement Enhancement Act of 2019, more often simply called the SECURE Act, made significant changes to rules for retirement accounts — including when retirees have to start withdrawing money.

As we recently reported, even two years later, some financial advisers are being caught off guard by how the law is being implemented. Naturally, investors themselves are also confused.

7. Socially responsible investing (ESG)

Financial advisers with clients who inquired about this: 31%

One growing investment trend is “environmental, social and governance investing.” Known as ESG, it’s the idea that you can pour money into huge companies while still trusting them not to take profit-enhancing shortcuts that harm people or the planet. More than $17 trillion was invested in ESG-focused funds as of 2020.

Money Talks News founder Stacy Johnson has hosted a podcast discussing whether ESG is a positive change or simply hype marketing.

8. Fees

Financial advisers with clients who inquired about this: 19%

At a time when investors are particularly sensitive to increased costs, it’s no wonder so many people are asking their financial advisers about fees.

If you think you are paying too much for your investment advice, stop by the Money Talks News Solutions Center and learn how to find the perfect financial adviser.

9. Weed stocks

Financial advisers with clients who inquired about this: 17%

While no longer as hot a topic as cryptocurrency, many people view the increasing legalization of the budding cannabis industry as an investment opportunity. States also see it as a tax revenue opportunity.

10. Direct indexing

Financial advisers with clients who inquired about this: 6%

Direct indexing is essentially the idea that a mutual fund or an exchange-traded fund can be a DIY project. In other words, some investors think they can match or beat the performance of popular index funds by individually buying stocks.

“Having to buy a relatively large number of individual stocks that make up an index, in the percentage needed to replicate its performance, has traditionally been an impediment for most investors to use this strategy,” Fidelity explains. Fractional shares — allowing you to buy a small piece of a popular and expensive stock — and zero-commission trades have made it easier.