Market volatility was cited by 79% of financial advisors as the biggest challenge for investors during 2012, according to a survey conducted by Putnam. It’s easy to see why. Stock market volatility has been much higher since the 2007 subprime crisis compared with earlier years, making risk a major concern for portfolio strategies.

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A large segment of the survey’s respondents — 30% — also described the European debt crisis as the topic most likely to influence markets this year.

In addition, 98% of advisors agreed that actively managed funds should play a role in client portfolios to help investors meet the twin challenges of mitigating risk and finding returns.

A total of 195 advisors, from a range of distribution channels, participated in the online survey between December 2011 and January 2012. Responses to the volatility and active management questions are below.

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For Putnam’s views regarding both market volatility and active return opportunities, read Capital Markets Outlook.