A recent survey of more than 1,011 U.S. investors by Gallup and Wells Fargo, the Investor and Retirement Optimism Index, has unveiled that half of investors think interest rates will “go up a little” and 5 percent think they will “go up a lot.” The report says that investors might have become used to low or zero interest rates and have looked past CDs and money market accounts, while putting most of their investments in the stock market.
According to the survey, low rates have caused investors to “put more money in the stock market than they are usually comfortable with” (13 percent), while the majority (86 percent) said that that was not the case. Gallup posits that rising interest rates might make investors leave the stock market.
The survey also asked investors if they would take their investments out of the market should the Fed raise interest rates: 33 percent said “not too likely,” 43 percent said “not at all likely,” while 5 percent said they are “very likely,” and 18 percent said they are “somewhat likely.” Even though the percentage of investors thinking about transferring their stock market investments to other products is not large, Gallup says that it is “significant in terms of the effect it could have on stock values. Retirees and nonretirees have similar views on this question.”
Take a look at our infographic below. To read the full report, go here.