- Investors should consider moving cash into the market now, according to Vanguard’s global head of investor research and policy.
- Fiona Greig said retail investors were trading lower, suggesting a “keep course” stance and a brighter economic outlook.
- In her view, investors can take advantage of the current situation by increasing their savings rate and leaning more toward employer-sponsored retirement accounts.
Investors are increasingly holding their positions in the market despite volatility, according to Fiona Greig, global head of investor research and policy at Vanguard, adding to optimism about the broader economic outlook. is shown.
Low retail trading activity in recent days and willingness to hold positions suggest a more optimistic view on the stock, she said in an interview with an insider.
“Yes, there has been volatility, but the long-term outlook is [investors] The stock market is stable,” Greig said.
In a Vanguard memo Thursday detailing investor behavior trends, data showed investors in December expected a 2.7% stock return over the next 12 months, up from 0.6% in October over the five-year period. It is up from a low of , but still more pessimistic than it was a year ago.
Investor expectations for returns over the next decade have also remained relatively stable, dropping from 7.2% in October to 7% last month. The numbers still point to a buy-and-hold environment.
As of December 2022, investors are a little less worried about short-term stock returns.
Vanguard
“You can also take the view that a rate hike is priced in,” Greig said. “Look at the rate hike in December. It wasn’t a market event. Expectations are low, but we’re seeing pretty clear expectations: optimism about returns over the next 12 months or even 10 years.”
Raise the savings rate towards 2023
Increased optimism suggests it may be a good time to consider moving cash into the market, Greig said, with minimal risk and low cost. can be done with She said there is now an opportunity to increase the savings rate and increase the allocation of funds.
“Make sure you take advantage of your employer-sponsored retirement plan now,” she said.
Investment strategists added that it’s important not to be spooked by volatility and change strategies or let go of positions. After a brutal year like 2022, we should expect a choppy turnout, and the ongoing debt ceiling standoff could bring further uncertainty, she explained.
“Stay on course,” Greig said. “Don’t let volatility and short-term fluctuations pull you out unnecessarily.”
