Investor behavior

Investor Pulse: Optimism begins to fade

November 09, 2023

The chart has two lines. One line of the chart shows the average stock market return that investors expect over the coming 12 months. The data are shown on an every-other-month basis from February 2017 through October 2023. Investors’ 12-month expected return was 4.4% in October 2023, a decline from the expected return of 5.5% in August.  The second line shows the average stock market return that investors expect over the coming 10 years. The data are shown on an every-other-month basis from February 2017 through October 2023 and are steadier than for the 12-month time frame. Investors’ 10-year expected return stood at 7% in October 2023, just below the reading of 7.1% in August 2023.
The chart has two lines. One line of the chart shows the average annual GDP growth rate that investors expect over the coming three years. The data are shown on an every-other-month basis from February 2017 through October 2023. The three-year expected growth rate was 3.1% in October 2023, the same level it was at in August and June 2023. The second line shows the average annual GDP growth rate that investors expect over the coming 10 years. The data are shown on an every-other-month basis from February 2017 through October 2023. The 10-year expected growth rate was 3.8% in October 2023, slightly higher than the reading of 3.7% in August 2023.
The two lines of the chart show data on an every-other-month basis from February 2017 through October 2023.  One shows investors’ expected probability of a stock market disaster over the coming three years. It rose to 6% in October 2023 from 5.4% in August.  The second line shows investors’ expected probability of an economic disaster over the coming three years. It increased to 5.9% in October 2023 from 5.1% in August.

Contributors

Xiao Xu, Ph.D.

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