The percentage of investors who feel they are in good shape financially jumped drastically from six months ago, according to a new study by UBS Wealth Management Americas.
The percentage of investors who say they are in excellent or very good shape financially was 64 percent in the latest UBS Investor Watch report, compared with 44 percent six months ago.
This optimism accompanies a new definition of what constitutes risk, UBS says. The study found 41 percent of the 2,000 investors surveyed now define risk as a permanent portfolio loss, rather than defining it as volatility. UBS Wealth Management Americas is the financial advisory arm of UBS.
The survey found the majority of those surveyed (52 percent) feel their finances are better than they were a year ago, up from the 40 percent who felt that way as recently as January. Despite this newfound confidence in their finances, 70 percent of those surveyed said they are more concerned about avoiding losses while 30 percent are more concerned about missing out on market gains.
Concern about long-term care and being able to afford health care is growing, with 31 percent of respondents naming these issues as their top concern, compared with 26 percent who put it as the top concern in January. Retirement was named as the top concern by 16 percent.
Reflecting these percentages, only 37 percent of those surveyed feel highly prepared for their long-term care needs, while 64 percent feel highly prepared with their retirement planning. The survey found 39 percent of investors aged 25 to 49 are looking for guidance in funding long-term care.
Because women live longer than men, they are more concerned about aging issues, according to the survey. Females surveyed were more concerned about the future of Social Security (44 percent compared with 30 percent of men); being able to afford long-term care (37 percent compared with 27 percent of men); having someone to care for them in their old age (25 percent compared with 13 percent of men); and outliving their assets (22 percent compared with 12 percent of men).
Also, more women are highly concerned about the effects of the sequester (32 percent compared with 23 percent of men).
And 73 percent of those surveyed are extremely or very worried about the political environment in Washington. But there is a wide age gap about concern over taxes. Over half of those under 50 (51 percent) are highly concerned about more tax increases while only 39 percent of investors over 60 are highly concerned.