US election trumps inflation as investor fear

US investors are more concerned about the outcome of the upcoming presidential election than they are about inflation, but their confidence in their financial advisers is high, according to new research released by Janus Henderson.

The investment manager has released its 2024 US Investor Survey which reveals the degree to which investors have been unsettled by the dynamics of the presidential election with many looking to their financial advisers to help navigate the situation.

According to th research, just 42% of US investors that were surveyed are very satisfied with their current financial situation – down from 48% a year ago, and two-in-three (67%) believe the cost of living is increasing faster than their income.

“An election year marked by tumult is clearly weighing on the minds of today’s investors, as 78% of survey respondents are concerned about how the upcoming presidential election may impact their financial situation over the next 12 months,” the Janus Henderson analysis said.

“In fact, more respondents are concerned about the election than are worried about persistent inflation (70%), high interest rates (57%), poor stock market performance (57%), or a potential recession (55%).”

The research found that over the past 12 months 33% of survey respondents had shifted assets from equities to cash or fixed income investments, with a further 32% saying they are planning to do so.

“The primary reasons for shifting or planning to shift out of equities include higher interest rates, acting on a recommendation from their adviser, and feeling safer in cash or fixed income,” it said.

The degree to which financial advisers are helping US investors navigate the uncertainty is revealed by the fact that among those working with an adviser, 67% were very satisfied and 31% were somewhat satisfied with their relationship.

“Nearly half of advised US investors (42%) report their adviser is aged 50 years or older, and within this group, 42% said their adviser had addressed the topic of succession planning, 25% did not know their adviser’s plans but would be interested in learning more, and the remaining 32% did not see the need to address this topic,” it said.