The newly published Q1 2016 Wells Fargo/Gallup Investor and Retirement Optimism Index pegs investor confidence at +40. 

Discussing the research with PLANADVISER, Joe Ready, director of Wells Fargo Institutional Retirement and Trust, notes this is the lowest reading from the index in nearly two years, but the investor confidence measure still remains well above the negative scores seen during the last recession. “But it is down 19 points from +59 in the fourth quarter of 2015 and down 30 points from +70 last May,” Ready says. “Investors are clearly feeling stressed out, but the good news is that they are not in large numbers acting on their stress.”

The primary factor responsible for the decline is reduced optimism in the stock market and, increasingly, worries about long-term return potential in the U.S. and global economies. For example, the percentage of investors optimistic about the 12-month outlook for the stock market fell from 45% last quarter to 32%. The overall index dropped more among non-retirees than among retirees, although non-retirees remain slightly more optimistic, at +41 vs. +35 for retirees.

“The percentage of investors feeling confident in the stock market as a place to save and invest for retirement also fell, from 43% to 36%,” Ready says. “With confidence falling this low, that makes it all the more impressive that investors are showing restraint and keeping their equity during this protracted bout of volatility.” He observes that a very strong majority (81%) of investors say they are planning to ride out the volatility and have not made changes to their investments.

“Few investors, just 4%, say they sold stocks as a result of the volatility in January,” Ready adds, “and 11% even said they have purchased new stocks at what they believe to be discounted prices. I should also note that, even though the majority made no change to their investments, about six in 10 say they could still use financial advice to deal with volatility in their 401(k).”

NEXT: Investors warming to a new normal? 

When investors were asked if frequent stock market volatility will become “the new, normal pattern in the years ahead,” or if it represents “a temporary pattern,” 40% of investors opted to call it the “new normal” while 54% said it was “temporary.”

Ready observes that retirement savers are obviously hoping that volatility will recede: “For 39% of those responding to our poll, the volatility is having a direct negative impact on their life in the form of increased daily stress. This breaks down to 46% of retired investors and 36% of non-retired investors.”

“Another source of stress for investors is the fact that the Great Recession still has an impact,” Ready adds. “A majority, 70%, of respondents say they know someone whose financial situation hasn’t recovered since the economic downturn, while 37% say their own financial situation has not recovered. The Great Recession is a period in history that so many Americans are still very familiar with, even seven years past the lows.”

Putting on his economist hat, Ready points to other index findings that show the impact low gas prices are having on the U.S. savings and investing picture, noting that the short-term impact has been “muted if not negative, given the market declines, but over time the savings people are seeing from low gas prices may lead to more strength than it has so far. People are taking the savings and putting it into paying down debt and building short-term savings and retirement accounts, rather than pumping it back into the economy, but that may change.”

With oil prices reaching new lows, a third of investors (32%) say the major year-over-year decline in oil and gas prices is directly helping their household budget a lot—up from 27% a year ago—and another 36% say it is helping a little. Just 31% say it has not made much difference to them. Similar to a year ago, 37% of investors say they are using the savings to pay down bills, 31% are putting more money into savings and 27% are using the money for additional purchases.

NEXT: 401(k) sentiment still very positive 

Ready also highlights index findings that show a vast majority (91%) of non-retired investors who have access to a 401(k) plan say they are satisfied with it as a retirement tool.

“This includes 44% very satisfied and 47% somewhat satisfied,” Ready says. “Only 9% are dissatisfied. When asked what words come to mind when people think about their 401(k), the top three responses are ‘satisfied,’ ‘good,’ and ‘happy.’”

In another interesting finding, Wells Fargo says 59% of all investors think all businesses, regardless of size, should be required to offer their employees a 401(k) plan. Going a step further, 40% think all workers should be required to deposit at least 3% of their income into a 401(k)-type retirement plan; 59% oppose this. A majority (82%) oppose increasing fees and penalties for early withdrawals, whereas 17% favor such penalties.

“The conclusion is that 401(k) participants are very eager to get the most out of their plans and to see other people doing the same,” Ready concludes. “Ninety-three percent of 401(k) participants say it is important that companies provide access to investment advice as part of their 401(k) offerings to employees. Two thirds (66%) say this is very important, and another 27% consider it somewhat important.”

Additional findings and information on Wells Fargo are here.