September 9, 2013

Active Investors Confident About Market Growth

Investors are bullish on equities and health care, Fidelity says

A majority of active investors say they can match or beat the market this year, according to a poll of Fidelity customers who attended the Fidelity Traders Summit in Seattle on Aug. 27.

The poll found 77% believe the S&P 500 index will remain stable or increase 100 points or more. Seventy-three percent expect a personal return of at least 6%.

About 1,200 attendees responded to each poll question, and the majority said they trade at least 36 times each year.

Eighty-three percent of respondents said they felt they could match or beat the S&P 500 over the next year. Looking back at the past year, though, just 48% of active investors said they matched or beat the index.

“It’s great to see investors have faith in the markets and plan more equity participation, but to give themselves a better chance of beating the anticipated market growth, they should take full advantage of their brokerage firm’s education and tools, as well as consider consulting with a financial professional,” Ram Subramaniam, president of Fidelity’s retail brokerage business, said in a statement.

Active investors overwhelmingly favored equities. More than 70% of respondents said that’s where they were putting their dollars. Twelve percent of respondents said they were investing in cash and 7% were investing in real estate.

Fidelity found 43% of respondents don’t use a hedging strategy in their equity portfolios. When they do, bonds are the most common tools, with 35% of active investors saying they use them as a hedge. Thirty-one percent of respondents said they used options, and 20% said they use conditional orders.

However, 41% of respondents overall said they were concerned about losses incurred with rising bond rates. Just 20% of respondents said the rising in bond prices was an “opportunity.”

Although 57% of active investors said they had a defined trading strategy, just 41% actually stick to it.

Respondents were most confident about the health care sector, with 34% of active investors saying they were bullish on that industry. Information technology (21%) and energy (20%) were also favorites.

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Check out Losers vs. Bigger Losers: Bond Lessons From the Summer Sell-Off on ThinkAdvisor.

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