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Macro-economic factors and the state of the country’s balance sheet continue to weigh on the minds of retail investors, although younger investors tend to have a much rosier perspective than their elder counterparts. This is according to the quarterly retail investor sentiment survey from TD Ameritrade Holding Corporation (NYSE: AMTD).
Finding #1: investors’ economic expectations for 2013 are a mixed bag of ups and downs
Today, 46 percent of investors say they are optimistic about their 3-month outlook for the U.S. economy, up slightly from 43 percent in September 2012. This sentiment, while not wildly bullish, is in-line with the varied views investors have about how the economy and markets will fare by the end of 2013, including:
The S&P 500 will be higher (55%)
U.S. Unemployment will be lower (54%)
U.S. GDP will be higher (45%)
Taxes will be higher (85%)
Corporate Earnings will be higher (53%)
The Federal Deficit will be higher (73%)
Additionally, younger investors were much less likely to have a pessimistic view of the economy. Just fourteen (14) percent of Generation Y and Z investors (those born from 1977-1994) said they were pessimistic. This compares to the 34 percent of Generation X investors (born 1965-1977), 26 percent of Boomers (born 1946-1964) and 38 percent of Matures (1930-1945) who said the same.
Finding #2: older investors worry more about the deficit; for younger investors it’s the economy
Investors are moderately confident in the stock market as a good place for their long-term investments, rating their confidence with a mean score of 6.6 out of 10. Of top concern are economic issues (26%), like unemployment and housing, and federal spending and deficit issues (25%).
However, age plays a part in determining which issue is more important. Thirty (30) percent of Mature investors, those born from 1930-1945, cited federal spending and the deficit as their greatest concern, versus only 17 percent of those in Generations X, Y and Z (born after 1965). On the flip-side, 30 percent of younger investors were more concerned about the economy, versus only 17 percent of Matures.