Investment Performance Expectations in 2022


In a year in which the stock market has already dropped significantly, the ability for a financial advisor to create a significant investment return in 2022 will be challenging.  What are the expectations of investors?  If the market is somewhat bearish, do investors still expect their advisors to have a positive investment return?

Spectrem Group asked investors if they believed their financial advisor should beat the market.  A third of investors felt that their own returns should be the same as the stock market.  Therefore, if the market is down, these investors will feel as if their advisor acted appropriately.  Almost a quarter of investors (22%) believe that their advisor should beat the market by 1-1.9%.  An additional 18% want their advisor to beat the market by 2-2.9%.

Almost a quarter of investors expect their advisor to beat the market by more than 3% with 9% expecting a return of more than 9%.

Although the largest percentage of investors want their advisors to beat the market, their expectations regarding how the market will perform in 2022 are relatively low.  While 16% of investors believe the Dow Jones Industrial Average will end the year around 34,000, more than 20% believe the DJIA will be lower than 34,000.  In contrast, about a quarter of investors believe the DJIA will end the year above 35,999.



Millennials are much more likely to believe the market will perform better in 2022 than older investors.

Overall, investors (with the exception of Millennials) do not have high expectations for 2022.  Advisors would be wise to discuss anticipated returns in 2022 throughout the year so that investors understand what is happening and are not surprised at the end of the year.