Investors embrace market volatility as a buying opportunity

Despite widespread recession anxiety, American investors are growing more willing to act in the face of market turbulence.

That’s according to new survey data by the Nationwide Retirement Institute, a division of Columbus, Ohio-based Nationwide Mutual Insurance Company.

More than three in four non-retired investors expressed concern about a US economic recession over the next 12 months, but investor activity reached some of the highest levels recorded across the study's history, suggesting that anxiety and action are no longer mutually exclusive.

One in three non-retired investors said they plan to take advantage of investment opportunities over the next 12 months; up sharply from 21% in the summer of 2024. More than one in five said they intend to manage their investments more aggressively, compared with 16% two years prior.

Participation, not timing

Mark Hackett, chief market strategist for Nationwide's Investment Management Group, attributed this behavioral shift to a changing interpretation of what volatility actually signals.

"Investment markets reached all-time highs this summer in the face of elevated volatility, reflecting a shift in how investors are interpreting uncertainty. Rather than viewing volatility as a signal to step aside, many may be viewing it as an opportunity to be offensive versus the historic instinct to turn defensive," said Hackett. "We're seeing them use these periods of volatility to rebalance, diversify and position themselves for future growth, recognizing that participation, not timing, is often the key driver of long-term outcomes."

The data also shows a modest stabilization in long-term retirement planning sentiment. Just 15% of non-retired investors said they plan to retire later than expected, down from a peak of 22% in 2024. The share of investors who believe they may never be able to retire fell to 11%, from a high of 16% two years ago.

The protection gap advisors must address

Nearly three in ten non-retired investors said they have no formal strategy to protect their assets against market risk, and one in ten said they were unsure whether they did — a finding that points to a significant gap in advisor-client communication around risk management.

Financial advisors who understand how to close this protection gap may find a receptive audience as more than half of non-retired investors said recent market events have made them more likely to put part of their portfolio into an annuity or another guaranteed income solution.

Among advisors who do have a market risk protection strategy in place for clients, use of registered index-linked annuities has grown from 39% in the summer of 2023 to 52% in 2026, a 13 percentage-point increase over three years.  Six in ten (60%) advisors said events of the past 12 months made them more likely to recommend a guaranteed income solution as part of a client's portfolio.

Brad Carrier, vice president of Nationwide Annuity Distribution, framed the advisor opportunity clearly.

"Advisors can play a critical role in helping clients balance growth and protection by building strategies that don't force an either-or decision," said Carrier. "Through asset allocation, diversification and the use of solutions like annuities that incorporate downside protection, advisors can help clients stay invested during periods of volatility while managing the emotional and financial risks that sometimes lead to hasty decisions."

Systemic risks adding to the pressure

Beyond market volatility, advisors are tracking longer-term structural risks to client retirement plans. Nearly a quarter (24%) of advisors cited healthcare costs as among the most immediate threats to clients' portfolios.

More than half (55%) said they believe Social Security or Medicare funding will eventually be reduced, with 40% pointing specifically to Social Security solvency as a concern. Nearly three in five said they expect the future tax burden for clients to increase.

The data suggests that advisors who proactively build protection into client portfolios — rather than waiting for client-initiated conversations — are best positioned to meet a market moment defined by simultaneous optimism and anxiety.

The Nationwide Retirement Institute survey included 1,411 non-retired investors and 601 retired investors among its investor sample. All respondents held investable assets of $10,000 or more.