One year is a relatively specific period of time. Twelve months, 365 days (most years), and in some cases, an entirely new outlook on life.
How are your clients looking at the next year? Are they optimistic that economic conditions will get better, or do they believe the current situation is going to continue into May of 2021?
As part of its monthly research around the upcoming election, Spectrem asked investors to compare their current financial situation with what they remember their situation being like one year ago, and then compare their current financial situation with the situation they anticipate being in at the same time next year.
Such attitudes will not only influence how your clients plan to vote in November but will also determine how much interest they have in investing and adding to their portfolio allocations. Advisors should be aware of what their clients are thinking about the present and the future, either to provide guidance going forward or perhaps provide information that could improve your client’s outlook.
According to the May edition of Tracking the Election 2020, 33 percent of all investors believe their current financial situation is better than it was one year ago. Based on current economic conditions, that would likely indicate that the benefits constant upward movement of the stock market in 2019 outweighed the damage that has been done to portfolios during the coronavirus crisis.
However, in a 2019 survey of investors who were asked the same question, 52 percent saw their personal situation swinging upward. The trend on a monthly basis has been going down, from 66 percent in February of 2020, down to 31 percent in April. The May response was actually slightly higher than the April response.
As for what investors see in the future, 43 percent believe their personal financial situation will be better one year from now than it is today. That is likely a belief that somewhere between now and May 2021, economic conditions will improve as the economy recovers from the coronavirus damage. In 2019, when asked the same question, 54 percent of investors were expecting improvements for their personal financial situation, although no one could have predicted that a pandemic was on the horizon.
Keywords: investors, advisors, Spectrem, predictions, coronavirus, election