Fifty-three percent of financial advisors in a new survey expect the S&P 500 to gain at least 10% by year-end, while 36% said the stock market will be flat from where it was in late February, InspereX, a brokerage firm, reported Tuesday. Only 11% of advisors expect this year's market returns to be negative.
Slightly more than half of survey participants said a prolonged bull market in equities will start in 2023. Advisors have become increasingly confident about the U.S. economy, now rating their confidence at 6 on a scale from one to 10, up from 5 in June 2022.
Asked which asset classes would perform best this year, 48% of advisors said equities, 17% said bonds, 9% said cash and cash equivalents, and 8% said alternative assets. A mere 1% mentioned cryptocurrencies.
"If 2022 wasn't challenging enough for stock market investors, this year has been a 'gotcha' market — every time you start to feel confident, volatility reappears," Christopher Mee, head of market-linked products distribution at InspereX, said in a statement.
Still, Mee said, many advisors see potential for reasonable market gains and are looking forward to a new bull market. "The question is, do their clients share their faith in the market after last year left so many clients more worried now than ever about volatility?"
Red Zone Marketing conducted the survey online in February among 705 advisors from independent broker-dealers, banks and RIAs.
Perspectives on Volatility
Sixty percent of advisors surveyed said their clients were most worried about market volatility, while 33% cited inflation as their main concern. Only 5% of advisors said their clients were most worried about rising interest rates, and just 2% said rising taxes.
Not only are clients worried about volatility, 49% of advisors said their clients were more worried than ever about it. Sixty-two percent of advisors believe their clients are not nearly as comfortable with risk as their risk tolerance indicates.
