By Cyril Tuohy
A poll of financial advisors by the SEI Advisor Network reveals that 76 percent believe U.S. economic growth this year will be between zero and 10 percent, and an additional 17 percent think growth will come in at between 11 percent and 20 percent.
Last year only 41 percent of advisors anticipated slow and steady growth, and 40 percent said that U.S. economic indicators were headed for a correction.
“It seems like the psychological after-effects of the recession are finally starting to wear off and advisors are becoming more optimistic about the market,” said Steve Onofrio, senior vice president of sales and service with the SEI Advisor Network.
Financial advisors aren’t predicting huge gains, but “even anticipating slow growth is an improvement over where most advisors were a year ago,” he said in a news release. “It will be critical for advisors to now start communicating that optimism to their clients.”
Among advisors, 93 percent predict “a modest level of growth” for the Dow Jones industrial average this year.
Predictions about the future state of the economy and financial markets are notoriously unreliable.
A similar poll conducted by the SEI Advisor Network last September found that 58 percent of advisors predicted the Standard & Poor's 500 index would close above 1,650. They were right. The benchmark index finished the year at 1,848.36, a record.
Last September’s survey, however, also found that 88 percent of the 100 advisors polled believed the S&P 500 would not finish the year at a record high. They were wrong. The S&P 500 rose 30 percent higher in 2013 than in 2012.
SEI’s latest poll showing a shift in sentiment among financial advisors comes in the wake of lower unemployment numbers and the gradual curtailing of the Federal Reserve’s bond buying program, which has kept interest rates low.
Though sentiment about the future state of the economy is higher than at this time last year, 59 percent of advisors said the economic factor they were most worried about was geopolitical issues, 20 percent were most worried about the federal debt., 9 percent about Social Security, 6 percent about the state of the Chinese economy and 5 percent about unemployment, the survey found.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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