TradeKing Q4 Survey: Investors Expect a Market Correction in the New Year as Bullish Sentiment Erodes, National Security Is Top of Mind
According to the latest client survey by TradeKing Group, Inc., investors aren't feeling particularly "merry" about the equity market's prospects through the end of 2015 and well into 2016. Sixty-two percent of survey respondents believe the S&P will finish 2015 either flat or down by 5-10 percent over 2014's finish, and nearly 60 percent of investors believe the market is due for a correction in 2016.
The survey of 600+ independent investors was conducted November 17 – November 23, 2015 by TradeKing Group, Inc.
The Bears Overtake the Bulls in Q4
In April of this year, 44 percent of TradeKing survey respondents described themselves as "bullish," but November results paint a different picture -- only 21 percent of respondents identified as "bullish," while 26 percent identified as "bearish." The majority, however, remain "neutral/not sure" at 53 percent.
Confidence in the S&P 500 performance slipped considerably since April. In the November survey, only 38 percent think it will finish up (compared to 66 percent in April), while 62 percent predict it will finish either flat or down for 2015 (compared to 34 percent in April).
The Market Correction Cometh?
Fifty-eight percent of respondents said "yes" when asked if the stock market was due for a correction in 2016 compared with 20 percent who said "no" and 22 percent who were "unsure." Of that 58 percent who responded "yes," 21 percent anticipate the correction taking place by Q1, 44 percent by Q2, 26 percent by Q3 and 9 percent by Q4 of 2016.
National/International Security Seen as Top Threat to Market
Not surprisingly given recent international events, investors ranked national and international security as the biggest potential threat to market growth this year, followed by earnings growth and increased interest rates.
Investors Aren't Gellin' with Yellen
As Janet Yellen enters the last quarter of her second full year as Chair of the Federal Reserve, most independent investors are unimpressed by her job performance to-date. Only 24 percent of investors surveyed approve of her job performance, while 61 percent are either neutral (39%) or disapprove (22%) of her performance, with the remainder undecided.
Top 4 Sectors with Most Potential Heading into New Year
One area in which sentiment did not change significantly over the April survey results was investors' top sector picks. Investors still ranked the following four sectors as having the most potential over the next three months: 1) Technology, 2) Healthcare, 3) Energy and 4) Finance.
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