Optimism Remains High About Stock Market Performance
While investors are much less optimistic about the state of the economy and the
chances of future tax incentives, their views about the robustness of the stock
market remain high. Today, 62% say they are optimistic about the market's
performance over the next 12 months, while just 18% are pessimistic. These
numbers are virtually unchanged from last month (63% to 17%), and are comparable
to those of the spring and summer of 1998, before the one-day, 513-point drop in
the market at the end of August.
Furthermore, expectations of investors about rates of return on their portfolios over
the next 12 months have moved slightly upward, with an overall 15.5% expected
return rate now, compared to 14.9% last month, 12.9% right after the stock market
drop, and 15.2% last summer. Investors' expectations about the rates of return that
other investors will experience have also moved slightly upward, now at 13.3%,
compared with 12.9% last month, 10.5% right after the stock market drop, and 13.4%
last summer.
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