When E-Trade Financial recently asked investors to choose a movie title to describe their feelings about the current market, they named Dazed and Confused.
This may sound cheesy, but that title captured investor sentiment, which was more bearish than it had been in more than a year.
Fifty-five percent of investors surveyed in early January said they were bearish about the current market, up from 50% in the fourth quarter and way up from 34% in last year’s first quarter.
Forty-six percent of respondents said the market would drop in the next three months, 34% said it would rise and 20% said it would stay where it was.
Every quarter, E-Trade polls self-directed active U.S. investors who manage at least $10,000 in an online brokerage account. The most recent survey, administered by ResearchNow, comprised 919 respondents, two-thirds men and one-third women.
Eighty percent of investors in the study rated the U.S. economy as fair, good or great, while only 20% said it was poor or extremely so.
Indeed, 47% said the economy was robust enough for the Federal Reserve to boost interest rates again this year.
“A bearish outlook on the stock market can be expected given the performance we have seen at the start of this year,” George Fischer, senior vice president for trading, margin lending and cash management at E-Trade, said in a statement.