Active Traders Predict Substantial Market Return through Year-End
NEW YORK (MainStreet) Active traders expect the bull market to continue to run and most (73%) expect to gain an additional 6% return during the ride to the end of this year. A recent Fidelity poll of active investors says nearly 8 out of 10 respondents believe the S&P 500 will remain stable or rise more than 100 points from its current level and close to at least 1,758 by the end of the year. That's an additional 6% increase from yesterday's close.
More than 1,200 investors participated in the survey, most indicating they trade 36 or more times per year.
The surveyed investors favor equities by a large margin (71%), followed by cash (12%) and real estate (7%). The number of active investors believing they will match or beat the S&P500 in the next 12 months is a strong majority (83%), but represents an historic low over four years and 11 polls.
As domestic stocks have seen a healthy 20% gain over the last twelve months, nearly half (48%) of active investors surveyed said they matched or beat the S&P500's performance during that time. Going forward, the frequent traders are most interested in these sectors: Health Care (34%), Information Technology (21%) and Energy (20%)
A full 43% of those polled do not employ a hedging strategy for their equity portfolio. Of those who do, the top three instruments are bonds (35%), options (31%) and conditional orders (20%).
Rising interest rates are of concern to a large segment (41%) of these investors, yet 20% say the recent bump in bond prices represents an opportunity; 39% were neutral.
"When the markets are on the move with influences like global conflicts, rising rates and corporate earnings, it's helpful to take the pulse of experienced investors to understand how they're weathering it and what their expectations are for the future," said Ram Subramaniam, president of Fidelity's retail brokerage.
--Written by Hal M. Bundrick for MainStreet