Most retail investors feel bullish but concerned about what's to come

Most retail investors feel bullish but concerned about what's to come
Two surveys show optimism for equities is continuing for now.
OCT 18, 2024

America’s retail investors continue to be buoyed by performance in the equity market and expect the rally to endure in the near term.

Two separate surveys reveals an overall bullish sentiment, although investors recognize some potentially challenging times ahead.

Morgan Stanley Wealth Management’s quarterly retail investor pulse survey released Thursday shows that 59% of respondents are bullish, although this is two points lower than in the previous quarter as the presidential election approaches and geopolitical tensions rise.

Inflation is less concerning now with an eight-point drop in the poll, while the 2024 election (34%) and market volatility (23%) complete the top three concerns. Meanwhile, the potential for a soft landing has risen 10 points in investors’ views with 64% thinking the Fed will steer the economy to that outcome.

And 68% of investors believe the Fed has room to make further interest rate cuts given the strength of the economy, a 2- point increase from the previous quarter.

IT, energy, and healthcare remain the top three sectors in favor with investors.

“It certainly feels like we’re at a bit of an inflection point with the Fed in rate cutting mode and investors remaining bullish,” said Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley. “With year-end in close range, investors are starting to take stock of where the market stands but questioning what’s ahead. Despite some trepidation from the election and geopolitical uncertainty, the momentum from September has investors confident.”

Meanwhile, the AAII Sentiment Survey also continued to show bullishness was more prevalent among retail investors than bearishness.

But the weekly survey revealed a dip in bullishness (from 49% in the previous week to 45.5%) while bearishness rose (from 20.6% to 25.4%). Historical averages are 37.5% for bullishness and 31% for bearishness.

The survey also asked investors what they think of current stock valuations. Almost half felt they are generally overvalued, 35% think there is a mix of expensive and cheap stocks, and 12% think stocks are generally fairly priced.

Latest News

Farther debuts AI investment proposal tool for advisors to win clients
Farther debuts AI investment proposal tool for advisors to win clients

"Im glad to see that from a regulatory perspective, we're going to get the ability to show we're responsible [...] we'll have a little bit more freedom to innovate," Farther co-founder Brad Genser told InvestmentNews.

Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler
Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler

Former advisor Isaiah Williams allegedly used the stolen funds from ex-Dolphins defensive safety Reshad Jones for numerous personal expenses, according to police and court records.

Are you optimally efficient?
Are you optimally efficient?

Taking a systematic approach to three key practice areas can help advisors gain confidence, get back time, and increase their opportunities.

Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida
Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida

Meanwhile, Osaic lures a high-net-worth advisor from Commonwealth in the Pacific Northwest.

Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B
Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B

The deals, which include its first stake in Ohio, push the national women-led firm up to $47 billion in assets.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.