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Gallup: Concerned Investors Not Pessimistic About Stocks

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By    |   Wednesday, 26 December 2018 02:35 PM

Investors recently polled by Gallup were more likely to be optimistic than pessimistic about the volatile stock market's performance during the next 12 months.

The fourth-quarter Wells Fargo/Gallup Investor and Retirement Optimism Index survey also found:

  • 61% of investors express concern about volatility in the stock market
  • 49% are optimistic, 28% pessimistic about stocks over next 12 months
  • 77% say market is good place to invest and grow retirement savings
  • Optimism about the market's future has changed little over the past six months.

The survey was conducted Nov. 12-20, before the most recent round of stock market fluctuations, but after the Dow Jones Industrial Average had experienced swings of at least 500 points in a single day on 12 separate occasions in 2018. The survey reflects the views of 1,022 U.S. adults who have $10,000 or more invested in stocks, bonds or mutual funds.

Asked how they respond to 500-point single-day drops, 68% of investors say they feel comfortable riding these out; 19% say they view them as a good time to buy more stock; and 13% say such drops are hard to bear and cause them to consider getting out of the market.

Most U.S. stock investors had a comfortable and rewarding ride throughout 2017. The Dow increased by almost 5,000 points, and there were no days with swings of 400 points or more.

This year has been different. By the time the November Wells Fargo/Gallup survey was conducted, the Dow had swung up or down by 400+ points on more than 20 separate days; and the gap between its highest closing average for the year and its lowest exceeded 3,000 points, but with a net gain of just over 500 points for the year.

The roller-coaster ride has caused more than six in 10 investors to be at least somewhat concerned, but in spite of these concerns, most investors continue to give the stock market a vote of confidence -- rejecting pessimism about the next 12 months and endorsing stocks as a good investment for retirement planning.

Although the wild fluctuations in the year's first 10 months did not turn many investors away from the stock market, this does not mean their patience or confidence is limitless. The losses of the past few weeks may test investors' belief that riding out the rough times is their best option.

To be sure, President Donald Trump suggested that a recent swoon in U.S. stock markets is a buying opportunity for investors, even though many analysts blame his policies and Washington gridlock for the plunge.

“We have companies -- the greatest in the world, and they’re doing really well,” Trump told reporters at the White House on Tuesday.

“They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy,” he was quoted by Bloomberg as saying.

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Gallup: Concerned Investors Not Pessimistic About Stocks
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Wednesday, 26 December 2018 02:35 PM
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