Financial advisors see a disconnect between the economy and the stock market.
January's RIA Edge Advisor Sentiment Index found that only 35% of retail financial advisors said they have a positive view of the current state of the economy. At the same time, almost double that number – 62% of advisers – said they have a positive view of the stock market.
The Advisor Sentiment Index is a monthly survey that aims to gauge financial advisors' current views on the state of the economy and the stock market and where they think both will be headed — over the next six months and this time next year. .
In the January survey, most advisers seemed to suggest the economy will eventually pick up the market: Over the next six months, advisers are evenly split on whether they see themselves as more or less optimistic about the economy.
But that number improves when we look at this time next year. Half of the advisers (50%) surveyed see the economy as either somewhat (46%) or much (4%) better than it currently is.
Likewise with stock markets: Looking ahead six months, respondents are split: 36% predict improvement, 39% predict no real change and 24% predict a decline. Twelve months from now, most (56%) believe the stock market will improve.
When responses are weighted and placed on a spectrum from 0 (extremely negative sentiment) to 200 (extremely positive sentiment) with 100 being neutral, the Advisor Sentiment Index registers at 122 for the state of the stock market, fairly bullish, versus 105 for the economy , or barely above neutral.
Methodology, data collection and analysis by WealthManagement.com and Informa Engage. Data collected January 22-29, 2024. The methodology conforms to accepted marketing research methods, practices and procedures. Starting in January 2024, WealthManagement.com began promoting a short monthly survey to active users. Data will be collected within the last ten days of each subsequent month, with a target of at least 100 financial advisor respondents per month. Respondents were asked about their views on the economy and the stock market as of now, six months from now and one year from now. The responses are weighted and used to create an index tied to a neutral value of 100. Over time, the ASI will provide a sense of the direction of retail financial advisors.