The S&P 500 index is up nearly 14% year-to-date and the Dow Jones Industrial Average is up almost 9% over the same time, but that growth may be lost on the average investor, according to a survey by Edward Jones.
Forty-four percent of respondents said that stock market performance was poor or flat this year as low interest rates and negative headlines took their toll on investors perception, according to Kate Warne, investment strategist at Edward Jones.
There are times when the economy grows slowly and the stock market grows quickly and times when the economy grows quickly but the stock market does poorly, Warne said in a phone interview. People assume that if news about economy isnt great then stock market isnt doing well either.
According to Warne, many Edward Jones advisors were seeing clients who were hesitant although not as pessimistic as the survey indicated. She said it was the responsibility of the advisor to keep clients informed and on course in their investments. For her and Edward Jones, that means focusing on long-term investing goals.
Information about whats really happening as opposed to what you think might be happening can either make you feel more comfortable or give you a better perspective, she said. And second, it provides a better grounding for making decisions about the future.
Wealthier respondents reported feeling more confident than their peers in lower income brackets, although even that total was relatively pessimistic. Fifty one percent of those with household income greater than $100,000 said that the market had performed well compared to 34% of those with household incomes below $35,000.
Its important for advisors to make sure that clients know whats actually happening in the markets or has happened, especially with clients portfolios compared to what clients may think thats going on, Warne said. And this is a time when were seeing a bigger disconnect with what people perceive and what market performance as actually been.