Investor behavior

Investor Pulse: Stable outlook sustains optimism in August

September 13, 2023

U.S. stock returns: Expectations hold steady

Investors remain optimistic about short- and long-term stock returns

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 August 2023. Investors’ 12-month expected return was 5.5% in August 2023, the same level it was at two months earlier.  A 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 August 2023 and are steadier than for the 12-month time frame. Investors’ 10-year expected return stood at 7.1% in August 2023, the same level it was at in June and April 2023.
The U.S. economy: Investors’ outlook for growth remains stable

Investors continue to be relatively upbeat about the outlook for the economy

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 August 2023. The three-year expected growth rate was 3.1 in August 2023, the same level it was at two months earlier. A 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 August 2023. The 10-year expected growth rate was 3.7% in August 2023, just below the reading of 3.8% in June 2023.
The Fear and Doubt Index: Concerns about a deep recession are declining

The Fear and Doubt Index shows further easing

The two lines of the chart show data on an every-other-month basis from February 2017 through August 2023.  One shows investors’ expected probability of a stock market disaster over the coming three years. It fell to 5.1% in August 2023 the same level it was at two months earlier. A second line shows investors’ expected probability of an economic disaster over the coming three years. It fell to 5.4% in August 2023 from 6.0% two months earlier.
Tracking expectations by gender over time

The gender gap in expectations has reversed post-pandemic

A bar chart shows that for the period from February 2017 through March 2020, the expected 12-month stock market return averaged 4.9% for the men in the survey. The average was the same for women in the survey.  For April 2020, the expected 12-month stock market return averaged 2.6% for the men in the survey. The average was 1% for the women in the survey.  For the period from May 2020 through August 2023, the expected 12-month stock market return averaged 4.3% for the men in the survey. The average was 4.6% for the women in the survey.

About the Vanguard Investor Expectations Survey

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Contributors

Xiao Xu, Ph.D.
Rhea Thomas
Vanguard Information and Insights

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