Americans Roughed Up by the Market Still Think Stocks Are Great

(Bloomberg) -- Americans are still hopeful about the long-term health of the stock market, despite being pessimistic about how their investments will hold up in the short term, a Wells Fargo/Gallup survey found.

Most people remain eager to invest — especially to try to build their retirement funds, the survey found. The quarterly survey of 1,076 of adults with at least $10,000 invested was conducted between May 11 and 17, when U.S. stock markets had rebounded from their 2020 lows in March but were still significantly below mid-February’s highs.

Six in 10 investors say now is a good time to invest in stocks, and almost 70% are confident that it’s a good way to build wealth for retirement.

“Investors are displaying remarkable resilience at an unprecedented time,” said Tracie McMillion, head of global asset allocations strategy for the Wells Fargo Investment Institute Inc.

Still, after the extreme market volatility, investors’ general confidence about their finances and the economy took its deepest quarterly dive in the the Wells Fargo/Gallup Investor and Retirement Optimism Index since its creation in 1996.

In mid-May, people were split about how the rest of the year would turn out. About 51% said the worst was over, while 49% said 2020 still had more pain ahead.

While Americans remain optimistic about long-term returns, they are feeling the squeeze of a worsening job market. Many people now say they want to save and budget more carefully, and 30% of employed investors said they anticipated delaying their retirement age because of the current economic downturn.

Other report highlights:

• Within the Wells Fargo/Gallup Investor and Retirement Optimism Index, optimism fell the most on unemployment (down 34 points) and economic growth (down 26 points). People’s optimism about their 12-month investment targets declined (down 32 points). But two-thirds remain optimistic about reaching their five-year investment targets.
• Only 8% of investors surveyed in mid-May thought it would be smart to sell stocks to protect against more losses. About half said they would hold, and 35% saw it as a time to buy.
• The coronavirus pandemic prompted a quarter of survey respondents to financially help out other family members. More than a quarter said their income had fallen, while 15% had been furloughed or temporarily laid off.

©2020 Bloomberg L.P.