VALLEY FORGE, PA (February 26, 2020)—In a report released today, Vanguard researchers present results from a new survey that examines investor expectations for U.S. stock returns, GDP growth rates, and bond returns. Citing data obtained during a series of surveys issued to Vanguard retail clients and 401(k) participants, Investor expectations: A new survey revealed investors assigned a 72% probability of conventional equity market returns (defined as a one-year return ranging from –10% to 30%), and anticipated one-year stock market returns of roughly 5%.
“Vanguard recognizes that expectations play a key role in making financial decisions,” said Steve Utkus, global head of investor research for Vanguard Investment Strategy Group and co-author of the paper. “Rather than focusing on past financial markets, our research seeks to understand what investors are anticipating in terms of future scenarios and events.”
In the paper, Vanguard researchers highlighted the following findings:
Data Collected from Retail Investors and 401(k) Plan Participants
In order to better understand expectations for future market scenarios, a random sample of U.S.-based Vanguard retail and 401(k) investors participated in a bi-monthly, online survey.
“More than 16,300 respondents completed approximately 32,200 surveys in 15 installments over the past two-plus years,” said Jean Young, senior research associate with Vanguard Investment Strategy Group and co-author of the paper, who noted a caveat about the benign market environment. “With this data serving as a baseline for understanding individual investor market expectations, we are seeking to use ongoing surveys to evaluate the ways in which expectations evolve and are interrelated with other dynamics (e.g., savings rates), especially during periods of market volatility.”
Vanguard is one of the world’s largest investment management companies. As of January 31, 2020, Vanguard managed $6.2 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 425 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.
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This study is based on a larger effort by researchers at the Yale School of Management, Stanford Graduate School of Business, New York University Stern School of Business, and Vanguard. An in-depth analysis can be found in S. Giglio, M. Maggiori, J. Stroebel and S. Utkus, “Five Facts about Beliefs and Portfolios,” 2020.