Global Confidence Is Up, but U.S. Investors Don’t Feel It

February 27, 2014 at 10:45 AM
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Globally, investor confidence is increasing. When you look at American investors, though, not only are they far less optimistic, they're dramatically less optimistic than they were in 2013.

Schroders released its Global Investment Trends Report on Wednesday. The report is based on a survey of nearly 15,750 investors in 23 countries.

More than half of global investors said they were optimistic about investments in 2014, up from 48% in 2013. In fact, global investors reported lower levels of concern over several issues, including increased taxes and inflation and low interest rates. Less than a quarter said they were concerned about the economic recovery, down from 40% in 2013. Last year, almost half of respondents said they were most concerned about eurozone debt; in 2014, that fell to 19%.

Just 37% of U.S. investors said they were optimistic about investment opportunities, down from 59% in 2013.

Fears over higher taxes, weak global recovery and increasing inflation are dragging down American investors' optimism, according to Schroders.

Interestingly, despite their pessimism for investing overall, only 12% said there was no asset class they felt could provide good returns in 2014. More than 70% said equities would bring the best returns. Americans were especially confident in U.S. equities; 56% of U.S. respondents said they would invest there in 2014. By comparison, 15% said they would invest in emerging market equities and 14% were interested in global equities.

Among all investors, 39% expect the most growth to come out of the Asia Pacific region, including China and Japan. North America came in second.

Increasing global confidence has pushed more investors toward equities, Schroders found, especially those outside investors' home countries. Just 41% of global investors said they think equities in their own countries will yield the highest returns, although 70% have high hopes for equities in general. Americans are the exception; 70% of U.S. investors believe the best performing investments will come from North America.

Although global investors cited retirement saving as a priority for their investing, they tend to have a fairly short time horizon. Just 5% of investors said they look 10 years ahead. More than 60% said they invest on a one- to five-year time horizon.

Among Americans, 67% said they were prioritizing retirement saving, more than any other country. They also had the longest average time horizon at six years. In South Korea, where 62% of the population is making retirement saving a priority; the average time horizon was just 3.4 years.

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