COVID-19 and market volatility

What we’ve learned from 2008 and how people are managing today’s new financial challenges

To gain a better understanding of what consumers think about current market volatility and COVID-19, Principal® conducted a brief “pulse” survey to gain insights on what they’re thinking and how they’re managing their finances.

Through comparative research captured shortly before the COVID-19 pandemic began and during the first month of the pandemic, we’ve found some good news:
Although times are uncertain, and many people are surprised or worried about COVID-19’s affect on our lives, consumers have been practicing what we see as positive financial behaviors. Most notably, people are concerned more about others than themselves and prioritizing spending less and saving over shopping—with some wanting to invest more in this environment.
The following summary captures respondents’ top concerns and indicates how they’re managing finances and shifts in markets due to the current COVID-19 situation. Information provided here also captures insights financial professionals can use to better serve their clients during the days, weeks, and months ahead.
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Survey methodology & respondents

Online survey

8-minute survey conducted by Principal


  • Age 30+
  • U.S. resident 
  • Consumer has a financial product or service with Principal®

Field dates

Phase 1: Dec. 18, 2019 – Jan. 9, 2020   

Phase 2:  March 25 – April 1, 2020

Phase 1 respondents

2,752 Consumers

  • 44% Workers
  • 56% Retirees

Respondents product ownership:

  • 18% - Annuities
  • 20% - Mutual funds
  • 61% - Retirement plan participant
  • 1% - Money Market or CD

Phase 2 respondents1

1,329 Consumers

  • 35% Workers
    11% of workers are “super savers” (they save more than 90% of the allowed maximum in their retirement savings plan)
  • 65% Retirees

Respondents product ownership:

  • 21% - Annuities
  • 20% - Mutual funds
  • 58% - Retirement plan participant
  • 1% - Money Market or CD

Learning from The Great Recession has helped consumers prepare for today’s financial challenges

What consumers are saying2:

Some survey participants shared with us that they are more emotionally and financially prepared for the market volatility we’re experiencing today, in part due to the learnings gleaned from the Great Recession of 2008/2009. “We have had recessions in the past with the market dip and it has come back,” wrote one of our respondents. “Because this is due to the corona virus, I think that the stock market panic will ease up when there is news of a curve in the outbreak. It is a watch and see situation.”

And, although the market has dropped significantly, consumer confidence for having enough money saved to live comfortably in retirement has only decreased 5% overall.3

What consumers are doing:

The learnings from just over 10 years ago are front-of mind for many consumers today, and are being applied to the market volatility we’re currently experiencing.

We’ve found that the majority of consumers also report their mix of investments are diversified4.
Investments are diversified
Emotionally prepared
for market volatility
Financially prepared for
market volatility
The Great Recession has not prepared
me for what we are experiencing now
Past performance is not guarantee of future results.

Small businesses and community health are front-of-mind concerns

What consumers are saying5:

“The effects [COVID-19] has had on our community and our countries financial and businesses, and the impact it is having on families and their well-being both health and financially have been surprising,” shared one of our survey participants.
Despite some survey respondents feeling confident in their savings, they are still concerned about others in their community and how they’ll hold up throughout the months ahead. As one survey respondent said, “My wife and I enjoyed regular full-time employment with opportunities to participate in employer sponsored investment programs. Diligent savings over the years have resulted in very positive gains. And we are fortunate to live on current income and not have to withdraw from savings. I’m very concerned about those that have lost their jobs. And, I do realize that prolonged pandemic could be devastating.”
Small businesses in their
community weathering closures
The coronavirus spreading
in their community
Me and/or my family contracting
the coronavirus
Investing involves risk, including the loss of principal.
Base: Workers n=423-450; Retirees n=170-796
How concerned are you with the following, due to COVID-19?

What consumers are doing:

“This is a very personal for many people and now is not the time to be focused strictly on our own well-being. It’s time to take care of each other; locally, nationally and globally,” said one of our respondents.
This holistic concern with the well-being of their community’s small businesses may be inspiring consumers to look for ways to help throughout their communities.
As one of our respondents reported, “We are buying and eating at locally owned and operated business. [And] checking on each other and just living one day at a time for now.“

Consumers are being careful and making plans for what we see as positive financial change in their near futures 

What consumers are saying6:

Being careful with finances has influenced some lifestyle changes for some of our respondents. This means curbing spending that had been previously planned, prior to COVID-19. “I’m putting off traveling and any larger expenses,” said one survey respondent.

Spend less


For other survey respondents, just “remembering to breathe and not act too quickly,” is the plan for the near future.

What consumers are doing:

For the most part, consumers appear to be targeting three main behaviors, in regards to their finances:

  1. They’re spending less and saving more,
  2. They have positive plans for their tax returns and stimulus funds,
  3. They’re not touching their current savings and investments.
What changes with your financial health do you plan to make as a results of the current market volatility and COVID-19? Select all that apply.
Base: Overall n=1,316; Workers n=467; Retirees n=849
Condensed list of changes shown

They’re making good plans for their tax returns and/or stimulus checks

What consumers are saying:

Spend less


Most of our survey respondents reported they have a plan for funds to go towards savings, bills, or debt. “I learned from our depression era parents to be frugal, save, and strive to be debt free,” said a male baby boomer.

What consumers are doing:

We found several ways consumers plan to spend any funds they may receive from upcoming tax returns and/or stimulus checks. Our survey respondents report most that they’ll use the funds to:

  1. Invest in a savings account
  2. Pay bills
  3. Build or replenish an emergency savings account
Base: Total n=1,326
In the next few months, if you end up receiving money from the government from either a tax refund and/or economic stimulus, what do you envision doing with the money you receive? Select all that apply.

The majority are leaving their investments alone, in hopes of giving them time to recover

What consumers are saying:

Several consumers mentioned they plan to seek advise regarding specific questions from a financial professional. Others report they’ll keep money where it is, and stay the course. As one female respondent over the age of 70 shared: “I think my account is pretty good and hopefully the markets will stabilize in the next quarter … and hopefully the coronavirus, especially here in NYC, will not take many more lives, and the people affected will get the help they deserve to get better.”

What consumers are doing:

Folks are generally staying the course and being rather conservative fiscally. Our research found that 66% of overall survey participants don’t plan to do anything with their investments.

Many consumers have been staying the course in response to market volatility

Staying the course

Watching the market more often


Doing nothing

Base: Total n=1,323; Workers n=469; Retirees n=854
Knowing markets go up and down, what have you been doing in response to recent market volatility? Select all that apply.

Building client confidence is key for financial professionals

Despite financial challenges and the COVID-19 pandemic, some consumers are reporting confidence during these challenging times, as mentioned earlier. And, from our research, we can see that this group is taking certain actions with their finances.

Who appear to be the most confident to live comfortably in retirement?

Our survey’s  ‘super savers’  (workers who defer more than 90% of the IRS maximum in their workplace retirement savings plan).

“Working with my Principal adviser before and after retirement has prepared me for the unforeseen and market volatility.“

It makes sense that those who have saved more are likely more confident, but it’s a dramatic comparison worth noting: 56.6% of super savers are confident, compared to 43.2 % of non-super savers.

How financial professionals can help clients build confidence

One of the first priorities for building retirement security is an emergency savings account—so when adversity hits, consumers don’t have to turn to their retirement savings for a lifeline.

Building an emergency fund and working with a financial professional are good first steps for consumers to prepare for difficult financial challenges. But, there are other ways financial pros can help clients during the days, weeks, and months ahead.

In regards to what consumers are currently seeking from financial professionals, here’s what we heard6:

  1. Consumers want holistic financial advice on how to manage money during volatile markets or times of crisis.
  2. They’re seeking out ways to save more (even when money is tight)
  3. And, they want help choosing how to investments (what, when, and where to invest)

Profile of workers who remain confident they’ll have enough money to live comfortably in retirement7

What’s next?

Principal will continue to reach out to consumers, financial professionals, and plan sponsor in the time ahead to garner insights into how COVID-19 and market volatility is impacting us all—so that we can strive to find ways to empower and educate our clients.

Want more information about this research, or how it can help you and your clients?

  • Read the full report on this research.
  • Visit our COVID-19 site for advisors for more information on how to help individual clients and businesses.
  • Feel free to reach out to your representative of Principal® for help.
See a PDF of this article
1. What is your biggest surprise as it relates to the coronavirus?
2. We’ve been in a bull market since the end of the Great Recession in 2008/2009. How has the Great Recession prepared you for the market volatility we’re experiencing today? Select all that apply.
3. Base: Overall n=1,294 ; Workers n=456; Retirees n=838
4. Diversified portfolios include investments spread across different investment options from various asset categories, such as fixed-income, U.S and non-U.S. equities (The asset mix of a portfolio depends on investor's risk tolerance and financial objectives.)
5. Knowing markets go up and down, what have you done in response to the market volatility? Select all that apply. - Other: - Text What changes with your financial health do you plan to make as a results of the current market volatility and COVID-19? Select all that apply.
6. These will be referenced in the coming slides. Listed here in no ranking order.
7. Base: How confident are you that you have enough money saved to live comfortably for the rest of your retirement years? Profile of workers that are very confident.
8. Base: Total n=1,323; Workers n=469; Retirees = 854
During this bout of market volatility, stock valuations have generally declined. Are you saving or investing more in the market due to this?
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering  legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters  pertaining to legal, tax, investment or accounting obligations and requirements.


Principal Life Insurance Company has summarized the results and comments of the<date>, <survey name> conducted by Principal Life.


Insurance products and plan administrative services are provided through Principal Life Insurance Company a member of the Principal  Financial Group®, Des Moines, IA 50392. Certain investment options/products may not be available in all states or U.S. commonwealths.


©2020 Principal Financial Services, Inc. PQ12823A | 1181193-052020 | 05/2020