Market volatility is leading to increasing confusion among investors but making financial advisers more resolute. Both the groups are also concerned pre- and post-February market volatility, though due to varied reasons, according to a study by Invesco.
The study, which polled over 800 advisers and 1,015 investors, was conducted in January and April 2018 in order to compare the reactions before and after the February downturn.
Following February’s downturn, 57% of investors were found expecting a disruption to happen this year versus 49% in January.
Rising interest rates and rising inflation were among the main concern of advisers, while investors were found to be primarily concerned about Congress and the federal budget deficit.
However, both advisers and investors were unified in their view of trade war being a key concern this year, which could result in a downturn.
Both the groups were also found to agree on the possibility of a recession on the horizon by 2021.
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By GlobalDataDespite their concerns, investors remain committed to their investing strategies. However, their view of the US and global economies and personal financial situation was found to worsen.
Of the investors polled, 27% believed that the global economy will be worse in the next 12 months compared to 17% in January, while their outlook on the US economy was found to be 6% worse compared to January. Also, investors’ pessimistic view on their personal financial position was found to reach 8% in April from 4% in January.
On the contrary, advisers were found to hold a positive view on the global economy, with 87% citing it as a good investment climate.
Also, half of the advisers polled believed US and global economies to be better after 12 months.
Invesco global chief market strategist Kristina Hooper said: “This research demonstrates that investors are confused and overwhelmed, causing them to react emotionally. Now more than ever, advisers need to educate and support their clients to help them reach their individual investment goals.”