Investor behavior

Vanguard survey reveals how investors feel about the market

October 10, 2022

3 key takeaways from the latest results
1. There’s been some lessening in short-term pessimism regarding stock returns and economic activity.

A less gloomy outlook on U.S. stocks and the economy in the short term

One line in the chart shows the average stock market return that investors expect to see over the coming 12 months. The data is shown on a bimonthly basis from February 2017 through August 2022. In August 2021, it was at 6.6%. In June 2022, it hit a low point for the period covered of 0.8% but rebounded to 3.4% in the latest reading August 2022.  Another line in the chart shows the average stock market return investors expect over the coming 10 years. The data is shown on a bimonthly basis from February 2017 through August 2022 and is steadier than for the 3-year timeframe. It was 7.0% in August 2021, 6.9% in June 2022, and 7.1% in the latest reading for August 2022. One line in the chart shows the average annual GDP growth rate investors expect to see over the coming 3 years. The data is shown on a bimonthly basis from February 2017 through August 2022. It was 3.5% in August 2021, 2.5% in June 2022, and 2.7% in the latest reading for August 2022. Another line in the chart shows the average annual GDP growth rate investors expect to see over the coming 10 years. The data is shown on a bimonthly basis from February 2017 through August 2022 and is steadier than for the 3-year timeframe. It was 3.5% in August 2021, 3.7% in June 2022, and 3.8% in the latest reading for August 2022.
2. The Fear and Doubt Index has declined. This index, which is a component of the broader survey, indicated that investors are a little less anxious about a stock market crash or a sharp downturn in the economy.

Fear and Doubt Index lessened versus the previous survey

There are two line charts showing the data on a bimonthly basis from February 2017 through August 2022.  One line in the chart shows the probability of a stock market disaster according to investors over the coming 3 years. It was 4.9% in August 2021, 7.5% in June 2022, and 6.0% in the latest reading for August 2022. Another line in the chart shows the probability of an economic disaster according to investors over the coming 3 years. This line tracks the line for a stock market disaster fairly closely and was 5.1% in August 2021, 8.2% in June 2022, and 7.2% in the latest reading for August 2022.
3. Our Disagreement Index has risen, signaling increased uncertainty surrounding stocks.

Disagreement Index changed course in August

One line in the chart shows the average stock market return that investors expect to see over the coming 12 months. The data is shown on a bimonthly basis from February 2017 through August 2022. In August 2021, it was at 6.6%. In June 2022, it hit a low point for the period covered of 0.8% but rebounded to 3.4% in the latest reading August 2022.  Another line in the chart shows the average stock market return investors expect over the coming 10 years. The data is shown on a bimonthly basis from February 2017 through August 2022 and is steadier than for the 3-year timeframe. It was 7.0% in August 2021, 6.9% in June 2022, and 7.1% in the latest reading for August 2022. One line in the chart shows the average annual GDP growth rate investors expect to see over the coming 3 years. The data is shown on a bimonthly basis from February 2017 through August 2022. It was 3.5% in August 2021, 2.5% in June 2022, and 2.7% in the latest reading for August 2022. Another line in the chart shows the average annual GDP growth rate investors expect to see over the coming 10 years. The data is shown on a bimonthly basis from February 2017 through August 2022 and is steadier than for the 3-year timeframe. It was 3.5% in August 2021, 3.7% in June 2022, and 3.8% in the latest reading for August 2022.
About the Vanguard Investor Expectations Survey

Contributors

Xiao Xu
Andy Reed
Vanguard Information and Insights

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