Investors are feeling uncertain and, for lack of a better word, “meh,” about markets. In fact, that is the word Caleb Silver, editor-in-chief of Investopedia, used during a panel at Exchange: An ETF Experience.
“Looking at what’s been going on in the last year… people are pretty ‘meh,'” Silver said, revealing a chart that showed that 31% of investors think the S&P 500 is going to be down 5% or more in the next six months, while 16% think it’s going to be up 5%, and 11% think it will be flat from current levels.
“Investors are in this, ‘I don’t know’ [mindset] right now; ‘I’m not sure if I want to commit to this,” Silver added.
Investopedia has been regularly surveying its subscribers since February 2020, asking them their sentiment towards markets. Are they bullish or bearish? What are they afraid of? Where do they see opportunities? According to the results of the financial media site’s January investor sentiment survey, the recession is investors’ top concern, followed by inflation, then geopolitical conflict. But while investors are worried about a recession, they’re less worried about it than they were in early December.
Investor sentiment is “cautious, warming up a little bit, but not ready to commit,” Silver said.
The Bigger Picture
Fellow panelist Jeff Desjardins, editor-in-chief of Visual Capitalist, discussed the undercurrents and global megatrends (like population) shaping how investors feel.
“I have seen these maps and charts as a way for people to get a fundamental understanding of the world around you. Because all the markets and all the things that we do, whether it’s ETFs or just the markets in general, are built on these real-world things that are happening in the background,” Desjardins said. “So, you have to have a fundamental understanding of what’s happening with those things before you work your way up to know what’s happening in the market.”
Predictions Mild and Spicy
Desjardins explained that every year, Visual Capitalist combs through hundreds of expert reports, podcasts, and articles to build a prediction database of more than 500 predictions for the coming year. Looking ahead to 2023, the “consensus predictions,” or the ones experts agreed upon the most, included such forecasts as: Artificial intelligence will pop up everywhere, China’s economy will bounce back after reopening, and Google’s stranglehold on search will loosen.
“So, these are not crazy predictions,” Desjardins said.
Meanwhile, some of the more “spicy” predictions included forecasts like: A country could ban all meat production by 2030, TikTok will be sold to an American company to avoid being banned in the U.S., and Netflix will likely merge with a company like Paramount.
For more coverage of the Exchange conference, please visit VettaFi | ETF Trends.