The economy, market performance and fiscal spending are the issues weighing the heaviest on retail investors’ confidence in the stock market today, according to the latest Investor Sentiment Poll released by TD Ameritrade Holding Corporation (NYSE:AMTD). Surprisingly, market “glitches,” which have received ample media coverage, were largely ignored by investors – 92 percent of those surveyed didn’t consider it their first, second or even third biggest concern.
“There is a great deal of uncertainty in the macroeconomic environment today, and retail investors have chosen to take a step back and wait for some of it to clear,” said Tom Bradley, president of retail distribution, TD Ameritrade, Inc. (“TD Ameritrade”), a broker dealer subsidiary of TD Ameritrade Holding Corporation. “Investors are focused on what they see every day – jobs or the price of a gallon of milk or a tank of gas – and they are not sure what those things will look like down the road. Once we start to see some clarity, we believe investor confidence will build and they will return to the markets.”
Caution amidst economic uncertainty
When asked to rate their confidence in the stock market as a good place for their long-term investments on a scale of 1 to 10, with 1 being unconfident and 10 being highly confident, retail investors were largely neutral, giving a mean response of 6.40. Additionally, 59 percent investors said that their confidence has changed in the last 2 to 3 years, and among those investors, 52 percent said that they are less confident today and 48 percent said they are more confident.Many investors surveyed expressed a desire to take on less risk in the current market environment (32%) or claimed they invested less in the stock market over the last six months (29%). However, they remain engaged, as 87 percent said that they continue to monitor their portfolios with the same or greater frequency than they did six months ago. And, despite their continued sense of caution, most investors (66%) admitted that their portfolios are better off than they were four years ago.