Financial professionals and their clients are increasingly expressing deep pessimism about the markets and the investment outlook, according to survey results released Tuesday by Greenwald Research, part of its annual Retiree Insights Program.
In particular, they're worried about the potential toll of inflation, a possible recession and global conflicts on their resources.
In a survey of more than 1,000 financial consumers 50 to 70 years old with at least $200,000 of investable assets, Greenwald Research found that their optimism about their investments had dropped from 67% a year ago to 31% today. Meanwhile, pessimism has shot up from 7% to 36%.
Those sentiments are mirrored among some 300 financial professionals who participated in the survey. Their optimism level has slumped from 78% in 2021 to 34% today, while pessimism about the markets and investment outlook jumped from just 3% to 25%.
Financial professionals' pessimism is also reflected in their expectations for investment returns. On average, they're looking for equity returns of 6% over the next year, compared with 9.7% in 2021 and 7.8% in 2020.
Combined with current low expectations for fixed returns, they estimate a total return of just 4.3%.
Perceptions of Financial Security Fall
Consumers' perceptions of their own financial security have dropped to levels last seen at the height of the pandemic, the survey found. Only 43% of retirees said they feel highly secure today — down from 56% — and just 36% of pre-retirees feel that way, down from 45%.
The malaise is evident in consumer expectations about future market recoveries. A year ago, some 60% said future recoveries would be as fast or faster than the record-fast pandemic recovery. Only 44% now consider that likely.
