U.S. investor optimism rises to hit 17-year high
The index, after rising in every quarter since the start of 2016, leveled off in the second quarter at +124 before rising to its current +138 in the third quarter.
The latest boost in optimism pushes the index almost 100 points higher than the +40 score measured in February 2016.
The 98-point hike over the past 18 months is the largest increase in the 20-year history of the index that is not a rebound immediately after a major drop in optimism.
The results come from a July 28-August 6 Wells Fargo/Gallup Investor and Retirement Optimism Index survey of U.S. investors with $10,000 or more invested in stocks, bonds or mutual funds.
The seven items that constitute the index include three on personal finances (meeting long-term investment goals, meeting short-term investment goals and maintaining income) and four on the economy (economic growth, the stock market, unemployment and inflation).
The survey was in the field as the Dow Jones industrial average approached, then surpassed, the 22,000-point milestone for the first time.
Sixty-one percent of investors now say it is a good time to invest in the stock market, up from 53% two years ago. Among those saying it's a good time to invest, the main reason is their belief that the market will continue to increase, mentioned by 47%.
Eighteen percent say stocks are a better investment than the alternatives, and 17% see stock market volatility as a buying opportunity.
Among the 37% who do not think it is a good time to put money into stocks, 52% say the main reason is worry about a market correction.
Optimism has risen considerably more among retired investors this year than among nonretired investors. In the first-quarter survey, the index was similar among retirees (+124) and nonretirees (+127).
Now retirees are considerably more optimistic than nonretirees, +158 versus +130. While nonretirees' ratings of the personal and economic components have moved little this year, both have risen significantly for retirees. ■