A Fidelity Investments poll of its affluent customers released Friday finds that uncertain economic events and conditions at home and abroad continue to dampen consumers' outlook about their investment future.
"The European debt crisis, recession fears and potential tax increases have stopped many U.S. investors in their tracks, and they are looking for ways to re-engage with an investment strategy that fits their risk tolerance and helps them achieve their financial goals," said John Sweeney, executive vice president at Fidelity Investments. "In talking with these affluent investors, they are looking for sound investment guidance about their portfolios so they can weather the daily fluctuations."The survey's key findings include:
European Debt to Have Lasting Impact - An estimated 65% believe that the European debt crisis will impact the U.S. equities market for at least a year.
S&P to End Year Flat or Down With Ongoing Volatility - Nearly two-thirds (65%) said they believe the S&P 500 is going to end the year either flat or down. Additionally, 80% expect market volatility will be the norm for the extended future.
Low Interest Rates Reduce Income - An estimated 82% of respondents said historically low interest rates were reducing their investment incomes.
Jobs Key to Economic Recovery With Double Dip Likely - Nearly three-quarters (73%) said a large drop in the unemployment rate is needed to spur strong economic growth, but 64% said a double dip recession is likely or already here.
Companies Must Continue to Invest - And estimated 61% believe that profitable companies should use cash for capital improvements or hiring new employees, versus holding it in reserve (18%) or distributing it as dividends (21%).
Tax Increase Concerns - Potential income tax increases were the most concerning for respondents (39%), with capital gains tax increases second (28%).
Respondents also reported on their current buying and selling strategies. Most respondents see long-term (67%) or short-term (21%) buying opportunities with current stock conditions. Few (12%) view the current market conditions as a selling opportunity.
The Fidelity Inside/Out Roundtable Event Poll was conducted Nov. 1 via a Webinar interface provided by On24. On average, 659 attendees responded to each question. On24 is not affiliated with Fidelity Investments.