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U.S. Investors Sitting Tight but Expect Slow Market Recovery
Economy

U.S. Investors Sitting Tight but Expect Slow Market Recovery

U.S. Investors Sitting Tight but Expect Slow Market Recovery

Story Highlights

  • 55% of investors say it's time to hold their stocks and wait for recovery
  • Fewer investors than last month think market will bounce back quickly
  • Most confident they can weather downturn, but only 4 in 10 very confident

WASHINGTON, D.C. -- The majority of U.S. investors -- those with $10,000 or more invested in stocks or bonds -- see the current stock market environment as a time to hold what they have and wait for the market to come back. Meanwhile, far more see it as a time to purchase more stock while prices are down (34%) than as a time to decrease holdings to protect from further losses (4%).

U.S. Investors' View of the Current Stock Market
How do you mainly view the current stock market environment?
March 17-19 April 3-5
% %
As an opportunity to purchase more stock while prices are down 34 29
As a time to hold the stock you have and wait for the market to come back 52 55
As a time to decrease your stock holdings to protect from further losses 4 6
Doesn't apply 10 9
Wells Fargo/Gallup Panel, 2020

The latest findings are based on an online, probability-based Gallup Panel survey conducted April 3-5. For this survey, investors are defined as adults in households with $10,000 or more in stock or bond investments, either individually or as part of a retirement account or mutual fund.

These results are an update of a Wells Fargo/Gallup survey of investors conducted by web using the Gallup Panel from March 17-19. At that time, the Dow Jones Industrial Average closings were hovering around 20,0000, down nearly 30% from the Dow's high point a month earlier. Since then, the Dow fell further to below 18,000 before building back up to just over 21,000 at the time of the latest survey.

While investors' broad reactions to the market climate have remained the same over the past three weeks, the percentage viewing it as a good buying opportunity has slipped five points, from 34% to 29%. At the same time, the percentages saying it is time to hold or sell stocks have each increased slightly.

Investors Turn Pessimistic on Market Rebound

As the COVID-19 crisis stretches into a second month with no end in sight to current business closures and sweeping social distancing recommendations, investors have grown less optimistic about how soon the market will recover once the coronavirus crisis ends.

Whereas in mid-March, 55% of investors predicted the stock market would bounce back quickly after the crisis and 45% thought it would take a long time to recover, today those figures are reversed: 45% say it will bounce back quickly and the majority (55%) say it will take a long time to recover.

U.S. Investors' Outlook for Stock Market Recovery
Once the coronavirus crisis has ended, do you think the stock market is more likely to bounce back quickly or take a long time to recover?
March 17-19 April 3-5
% %
Bounce back quickly 55 45
Take a long time to recover 45 55
Wells Fargo/Gallup Panel, 2020

Investors Confident, but Not Convinced, They Can Weather Market Downturn

More than eight in 10 investors are confident they can weather the current market downturn based on their existing asset allocation or financial plan. However, fewer than half, 39%, are very confident of this, while another 46% are somewhat confident. Altogether 16% are not confident, up slightly from 11% in March.

U.S. Investors' Confidence in Ability to Weather Market Downturn
How confident do you feel that you can weather the current stock market downturn based on your existing asset allocation or financial plan?
March 17-19 April 3-5
% %
Very confident 40 39
Somewhat confident 50 46
Not too confident 9 13
Not confident at all 2 3
Wells Fargo/Gallup Panel, 2020

While the majority of all subgroups of investors are at least somewhat confident they will get through the downturn, men (47%), investors younger than 35 (50%) and higher-income investors -- those earning $90,000 or more annually (43%) -- are the most likely to be "very confident." Consistent with their younger age, on average, employed investors are more likely to be very confident (42%) than retired investors (32%).

U.S. Investors' Confidence in Ability to Weather Market Downturn, by Subgroup
Very confident Somewhat confident Not too confident Not confident at all
% % % %
Gender
Men 47 39 12 2
Women 31 52 14 4
Age
18-34 years old 50 40 8 2
35-54 years old 38 42 17 3
55 and older 33 51 12 4
Income
$90,000 or more 43 43 12 2
$36,000-Less than $90,000 35 47 14 4
Less than $36,000 27 49 23 1
Employment status
Employed 42 40 14 3
Retired 32 52 14 3
Other not working 34 58 6 2
Wells Fargo/Gallup Panel, 2020

As of early April, relatively few investors, 17%, report having contacted a financial professional for advice since the market downturn. That is little changed from the 15% reporting this in the mid-March survey.

The vast majority of those who have contacted a financial professional say it was their own personal financial adviser (94%) they reached out to. Just 3% contacted a financial call center and 4% some other financial professional.

Learn more about how the Gallup Panel works.

Lydia Saad is a Senior Editor at Gallup.


Gallup https://news.gallup.com/poll/308012/investors-sitting-tight-expect-slow-market-recovery.aspx
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