Most investors are unsure that the stock market will get on with a steady growth
The resumed growth of stock markets shouldn’t be considered sustainable, said two-thirds of American investors. Despite the growth of the indices after the collapse in March, the resumption of instability in the markets is possible.
According to a Bank of America survey, over two-thirds of major players are confident that the current recovery in equity markets won’t last long. This was indicated by 68% of respondents, despite a 32%-growth of the S&P 500 index after March. Investors are confident that such a recovery is more related to the bear market than to the bull market, as the fundamentals indicate that pessimistic mood prevails on the market.
Investors interviewed expect a situation that will surprise most players. For example, the value of the most popular assets will change. At the moment, players are significantly overestimating the market after reaching record levels in February. The sharp drop in March was an unexpected move to a bear market as the quarantine and shutdown of many businesses froze the business of many companies. In this regard, investors were forced to urgently review their investment assets and get rid of the collapsed shares in order to avoid losses. As a result, governments and central banks have taken unprecedented measures to support capital firms and the public.
Investors interviewed by the bank also indicated that there is still hope for an economic recovery following the creation of the COVID-19 vaccine. The greatest danger, in their opinion, is the second wave of diseases, which can occur in the fall.
Investors are confident that investing in stocks is the worst option for preserving their assets. They prefer the strongest assets — cash and bonds. Among the sectors for investment, they indicated health and energy ones. Part of the cash savings of investors reached 5.7%, which is below the recent 5.9%. However, this indicator is still high. 73% of respondents advised enterprises to deal with debt closure and regulation of financial flows.