Investment advisors are gaining confidence in the markets while their institutional counterparts seem ready to throw in the towel. Who’s right?
This Website Is For Financial Professionals Only
Confidence among advisors rose a bit in October while the Global Investor Confidence Index hit its lowest point since its creation in 1998.
Currently it reads 1.5 points lower than its previous low set in October of 2008. A drop in European sentiment is mainly to blame along with slowing growth in Asia. This means mutual fund managers and other institutional investors have little appetite for risk and are staying away from equities.
The Global Investor Confidence Index assigns a precise meaning to changes in investor risk appetite. The greater the allocation to equities, the greater the appetite for risk. A reading of 100 is considered neutral. The index dropped to 80.6 last month.
The Advisor Confidence Index issued by Rydex AdvsiorBenchmarking showed advisor confidence levels at 96, still short of the neutral mark of 100 but up from 95 in September. The index’s most recent high was 105 in June.
The monthly index is modeled after the Consumer Confidence Index and measures the sentiment of 150 advisors across four broad investment categories: current economic outlook, six-month economic outlook, 12-month economic outlook, and stock market outlook.
Out of 10 four-week Advisor Confidence Index cycles through the third week of each month, advisor confidence increased five times. The biggest improvements
came in January, February, April, and June.