Five years after the 2008 financial crisis, we are still feeling the after shocks around the world. Among the deepest sources of investor anxiety today are the lower returns and increased volatility that have persisted over the past decade — or longer — among core asset classes.
Investors are eyeing the impact of this new market environment on investments, and on long-range strategies in particular, such as retirement income planning. The next step is to identify ways to navigate as we deal with a backdrop of market volatility, risks, and non-traditional opportunities. Conventional wisdom, shaped by decades of high-return investing, need to be reexamined, revised, or even scrapped. New thinking has become an imperative rather than an option.
Innovation has also become an imperative in approaching long-term investing strategies, such as those involving retirement assets. We have the ideas and tools today to enhance Americans’ retirement security. But both the investment industry and policymakers need to support innovations that help workers provide for their own future incomes in retirement. To start, we need to expand access to workplace savings plans, take automatic plan features to a new level of implementation, and raise the bar on deferral rates.
For informational purposes only. Not an investment recommendation.
This material is provided for limited purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, or any Putnam product or strategy. References to specific asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations or investment advice. The opinions expressed in this article represent the current, good-faith views of the author(s) at the time of publication. The views are provided for informational purposes only and are subject to change. This material does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. Investors should consult a financial advisor for advice suited to their individual financial needs. Putnam Investments cannot guarantee the accuracy or completeness of any statements or data contained in the article. Predictions, opinions, and other information contained in this article are subject to change. Any forward-looking statements speak only as of the date they are made, and Putnam assumes no duty to update them. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those anticipated. Past performance is not a guarantee of future results. As with any investment, there is a potential for profit as well as the possibility of loss.
Diversification does not guarantee a profit or ensure against loss. It is possible to lose money in a diversified portfolio.
Consider these risks before investing: International investing involves certain risks, such as currency fluctuations, economic instability, and political developments. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Bond investments are subject to interest-rate risk, which means the prices of the fund’s bond investments are likely to fall if interest rates rise. Bond investments also are subject to credit risk, which is the risk that the issuer of the bond may default on payment of interest or principal. Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds, which may be considered speculative. Unlike bonds, funds that invest in bonds have ongoing fees and expenses. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Commodities involve the risks of changes in market, political, regulatory, and natural conditions. You can lose money by investing in a mutual fund.
Putnam Retail Management.