American investors’ optimism declined again in the second quarter, according to The Wells Fargo/Gallup Investor and Retirement Optimism Index. The index dropped to 85, down 18 points from 103 a year ago. The index dropped in the first quarter also.
Investors are less optimistic than a year ago about maintaining their household income and reaching their 12-month and five-year investing goals.
The Wells Fargo/Gallup index measures U.S. investor confidence in the investing climate, based on a representative sample of U.S. adults with $10,000 or more invested in stocks, bonds or mutual funds. More than half of investors — 61 percent — say the stock market’s recent performance makes them concerned that the market is “peaking.” The latest poll was conducted May 6–12.
More than half of investors — 61 percent — describe the economy as “booming” or “solid,” but there are concerns that a recession is nearing: 51 percent of investors say a recession will begin either later in 2019 (11 percent) or in 2020 (40 percent). However, a clear majority — 66 percent — say they are “prepared” for how they will handle their investments in the event of a recession. This includes 72 percent of retirees and 64 percent of non-retirees.
“It is good to see that two-thirds of investors feel they are prepared to handle their investments during a recession,” said Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute. “While we do not see a recession in the near term, in many ways we are still recovering from the last one, which left a deep scar on many investors. This sense of preparedness is a positive sign.”