Active investors expect to beat S&P 500 in 2011

NOV 14, 2010
About two-thirds of investors who trade at least 36 times a year expect to have better returns in the next 12 months than the S&P 500, according to a survey by Fidelity Investments. The poll, conducted at Fidelity's San Francisco Traders' Summit on Oct. 26, also showed that 31% of active investors expect the index to rise more than 100 points by the end of the year, according to a Fidelity statement. That would represent a gain of at least 8.2%, according to Bloomberg. The bullish outlook echoes a Putnam Investments survey released last week that showed that most advisers expect the S&P 500 to rise within the next 12 months and more than half plan to increase their clients' equities allocation. The index rebounded 19% from its low this year in July as concerns about a second recession abated, boosting the index since March 2009 to 79%. “This most recent poll finds active investors even more positive than they have been in the past,” James Burton, president of Fidelity's retail-brokerage business, said in a statement. “They are re-engaged and repositioning their portfolios accordingly.” Fidelity also found that 46% of investors have boosted their trading activity recently to “take advantage of bargains,” up from 32% in a June poll. Stock-trading volume on U.S. exchanges slowed during the third quarter to a daily average of 7.66 billion shares, the lowest for a quarter, according to data compiled by Bloomberg that go back to 2008. Companies in the S&P 500 trade at an average price-earnings ratio of 12.6 times 2011 estimates, 39% less than the 20-year average, according to Bloomberg data. The multiple plunged in 2008 as Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in U.S. history and the index ended the year with its worst annual return since the 1930s.

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