Independent investment advisers remain fairly bullish in their outlooks for the economy and market performance over the next sixth months, even as their clients have become more pessimistic, a recent survey has found.
Of the 1,199 independent advisers polled by discount brokerage Charles Schwab (SCHW) in its latest semiannual survey, 63% said the S&P 500 ($INX) will rise over the next six months. That's essentially unchanged from Schwab's January survey, which found that 65% of advisers expected the market to post gains.
The survey has a margin of error of 2.89% and was conducted between July 13 and July 23, when the S&P 500 stood at about 1,083, Schwab said. The market is off about 3% since the survey was conducted.
As for the bigger picture, 59% of advisers don't see a double-dip recession occurring in the U.S. during the next six months, while 28% said another recession is indeed likely to happen. The remaining 15% said a second recession was neither likely nor unlikely.
Fewer Predict Rising Unemployment
Whatever the utility of such a survey, it appears that independent financial advisers have their work cut out for them. Nearly half say their clients are less optimistic about the market and economy than they were a year ago. Only 16% said their clients were more optimistic in their outlooks when compared with July 2009, while 35% said their clients' views remained unchanged.
Drilling down into some economic components, advisers have become more pessimistic about the state of the housing market since the beginning of the year. More than half (53%) said the housing market will continue to soften over the next six months, versus 46% who held that view January.
However, advisers have become more sanguine about the jobs outlook: Just 32% now foresee a rise in unemployment over the next six months, down from 40% in January. The majority of advisers also expect consumers to save more money, and say they see no signs of inflation. (See the chart below.)