It can seem strange that investors are looking at the stock market with negative vibes, as it reaches new all-time highs. However, they believe that once governments stop spending, to keep the economy afloat throughout the pandemic, and interest rates rise ever so slightly from their “zero” status, the party won’t last. At least, that is what a survey from Bankrate has found.
A Survey Looking Over the Next Five Years
Bankrate was interested in understanding the vision of investment professionals regarding the performance of the stock market, and so they turned to a survey to take their pulse. What it found was that two out of nine experts did not see the stock market outperforming over the next 5 years. Surveys have become very popular in the financial market to try to predict tendencies to come. That is partly because they are easy to produce and distribute, and provide results rapidly. Go to this link to learn more about the subject.
Investors seem to think that the rebound the stock market went through, was in great part created by the governments’ financial help. In fact, right after the steep fall of the markets, when the first lockdown came into place in Europe, and America was starting to suffer from the pandemic, the stock market went back up rapidly. That is because it understood that governments were going to protect companies and industries. It also brought down interest rate to zero (or close to), which the markets saw favourably.
What are the Key Takeaways from the Survey?
The survey also looked into what the experts thought next year would be like. The results were that they envisioned the S&P 500 gaining around 7.5 percent during that period. However, the global outlook of the next five years is bleaker, as they believe that stocks (in general) will bring in below or average returns. This is important, since almost 80% of investors agree with that prediction.
When the survey was taken by respondents, a large majority of them also saw the Presidential election being a factor in the growth of the stock market. A few days after a “still undecided” contest, but with the Democrat leading the race, the markets have already responded positively, with a general raise of over two percent in two days.
Investors are still quite optimistic about the end of the year results. However, it does not go beyond that. As far as what the new-year will bring, investors are afraid of the long-term effects of the pandemic on the economy.
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