March 22, 2012

"Bleak is the New Black" Finds BNY Mellon Wealth Management Investor Survey


More Than Sixty Percent of Americans Sense Public Pessimism about Financial Markets

NEW YORK, March 22, 2012 — Despite promising signs of a recovering market, nearly half (48 percent) of American investors believe they will run out of money at some point in their lifetime, according to a survey commissioned by BNY Mellon Wealth Management. This represents a sharp increase from just ten years ago when only 30 percent believed they would outlive their nest egg.

Underlining that anxiety, the survey showed that more than six in ten investors (61 percent) say that Americans are pessimistic about the markets compared to fewer than four in ten (39 percent) who sense optimism.

"When it comes to how investors feel about the financial markets, you could say that bleak is the new black," said Larry Hughes, CEO of BNY Mellon Wealth Management.  "Many people are so negative about the markets that they find it hard to believe that something could possibly go right.  We maintain that compelling investment opportunities still exist – that is, for those ready to take action." 

Bleak Outlook Creates Investor Inertia
The survey, conducted between February 9 and 12 of this year, found that worries about the markets and the economy are leading investors to delay making investing or planning decisions. In fact nearly six in ten (59 percent) said they are waiting for conditions to improve before taking action.

The upcoming Presidential election as well as potential changes to tax and interest-rate policies, are also prompting many to delay making investment or planning decisions, the survey found.  Nearly four in ten investors said they are holding off until after the election to take action and more than a third said they don't intend to make any decision before they have a better sense of where tax and interest rates are heading.

Positioning for Opportunity and Taking Action
To be sure, investor needs differ and no investment or planning solution is appropriate for every investor, yet Leo Grohowski, BNY Mellon Wealth Management's Chief Investment Officer, sees several opportunities in the current market.

"Shares in a number of U.S. companies are still very reasonably valued on many historical metrics.  And with the sell-off in emerging markets equities last year, we've been seeing opportunities in certain geographies and sectors." he said. "From high yield bonds to emerging market debt to strong dividend stocks, opportunities for yield exist outside the traditional fixed income sources in this market. Challenging markets can often provide the most promising investment opportunities."

Jere Doyle, Senior Vice President of BNY Mellon and an estate planning strategist for BNY Mellon Wealth Management, notes that the current combination of low interest rates, valuations and taxes offer specific planning opportunities.

"For example, given low interest rates, intra-family lending can be a compelling and timely estate planning opportunity. Bear in mind that transfer tax rates are likely to go up this year," Mr. Doyle said.  "There are also a number of mortgage and credit strategies now, too, because of historically low interest rates.  These are just a few of the opportunities that could be available for those prepared to take action."

For additional investment and planning insights and perspectives from BNY Mellon Wealth Management, visit www.bnymellonwealthmanagement.com.

About the Survey
The telephone survey was conducted among a national probability sample of 637 adults 18 years of age or older who invest in the markets by ORC International's CARAVAN® Omnibus Services on behalf of BNY Mellon Wealth Management from February 9-12, 2012.

BNY Mellon Wealth Management is among the nation's leading wealth managers, with more than two centuries of experience in providing investment management, wealth and estate planning, and private banking services to financially successful individuals and families, their family offices and business enterprises, charitable gift programs, and endowments and foundations. It is among the top 10 U.S. wealth managers with about $168 billion in private client assets and an extensive network of offices in the U.S. and internationally.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.8 trillion in assets under custody and administration and $1.26 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com or follow us on Twitter@BNYMellon.