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Wells Fargo: Latest Investor Confidence Survey Shows Slight Improvement

SAN FRANCISCO--(BUSINESS WIRE)--

Wells Fargo/Gallup Investor Optimism Index rebounds after dipping in earlier quarter

U.S. investor optimism improved in the latest Wells Fargo/Gallup Investor Optimism Index, following a dip in the previous quarterly survey as investors faced mixed economic signals. The index score is now 84, up from 72 in the third quarter survey and on par with 85 in the second quarter survey.

Gallup conducted the poll Oct. 7–13 as the stock market was making modest gains. The survey also followed the federal government’s monthly jobs report announcing that hiring had cooled in September amidst the ongoing trade war1, but that the unemployment rate had dipped to 3.5%, a 50-year low.2

“With a mix of encouraging and discouraging economic news, investors chose to focus on the positive, lifting their confidence in the economy as well as their own financial outlook,” said Adam Taback, deputy chief investment officer for Wells Fargo Private Bank.

The Wells Fargo/Gallup Investor and Retirement Optimism Index is a quarterly measure of U.S. investors’ confidence in the investing climate, including their perceptions of the economy and their own financial situation. For this survey, investors are defined as U.S. adults with $10,000 or more invested in stocks, bonds or mutual funds.

Personal dimension of investor confidence is highest this year

Investor optimism on the economic dimension of the index had slumped to 16 last quarter from 35 earlier in the year. While it improved slightly to 20 in the most recent survey, the economic dimension remains weaker than it has been in some time. By contrast, investor optimism on the personal index has held firm each quarter, so that the eight-point increase in the current survey brings the personal dimension to its highest level in more than a year.

Optimism rose in the latest survey about equally between retired and non-retired investors; however, of the two groups, retired investors continue to express the greater optimism.

1 https://www08.wellsfargomedia.com/assets/pdf/commercial/insights/economics/indicators/employment-20191004.pdf

2 https://www.washingtonpost.com/business/2019/10/04/us-economy-added-just-jobs-september-fresh-sign-economy-is-cooling/

Investor and Retirement Optimism Index

 

Total
U.S. Investors

 

 

Retired Investors

 

 

Non-retired
Investors

 

 

Personal
Dimension

 

 

Economic
Dimension

 

Change:

 

+12

 

 

+14

 

 

+15

 

 

+8

 

 

+4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019 Q4

 

84

 

 

106

 

 

74

 

 

64

 

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019 Q3

 

72

 

 

92

 

 

59

 

 

56

 

 

16

 

2019 Q2

 

85

 

 

108

 

 

76

 

 

52

 

 

35

 

2019 Q1

 

90

 

 

113

 

 

80

 

 

55

 

 

35

 

2018 Q4

 

98

 

 

111

 

 

91

 

 

63

 

 

35

 

Investors say investment trajectory is positive

According to the Q4 survey, most U.S. investors say their investment plan is on the right track (85%) and that they are prepared for a market correction (71%). Relatively few report that fear of a market correction is making their life stressful (33%), including similar proportions of non-retired and retired investors.

% Strongly/Somewhat Agree with Statements

 

 

U.S. Investors

Non-retired

Retired

 

 

 

%

 

 

%

%

Investment plan on the right track

 

 

85

 

 

83

 

 

89

 

Feel prepared for market correction

 

 

71

 

 

68

 

 

79

 

Fear of market correction making your life stressful

 

 

33

 

 

35

 

 

30

 

A different picture emerges when reviewing the percentages who “strongly agree” with each statement. On this basis, about one-quarter of investors express confidence that their investment plan is on the right track, including 32% of retirees and 23% of non-retirees.

Similarly, confidence in being prepared for a market correction drops from more than 70% total agreement among investors to 14% strong agreement. At the same time, investor anxiety registers just 5% when defined as those strongly agreeing that fear of a market correction is making their life stressful.

% Strongly Agree with Statements

 

 

U.S. Investors

Non-retired

Retired

 

 

 

%

 

 

%

%

Investment plan on the right track

 

 

26

 

 

23

 

 

32

 

Feel prepared for market correction

 

 

14

 

 

13

 

 

17

 

Fear of market correction making your life stressful

 

 

5

 

 

5

 

 

3

 

“While investors appear broadly confident about their retirement planning, most non-retirees and nearly half of retirees do harbor some doubts they are headed for success,” Taback said. “The same can be said for investors’ readiness for a market correction. While vast majority generally agree they’re prepared, most fall short of expressing complete confidence.”

About the Wells Fargo/Gallup Investor and Retirement Optimism Index

The results of this Wells Fargo/Gallup Investor and Retirement Optimism Index are based on a Gallup Panel web study completed by 1,696 U.S. investors, aged 18 and older, from October 7-13, 2019. The Gallup Panel is a probability-based longitudinal panel of U.S. adults who Gallup selects using random-digit-dial phone interviews that cover landline and cellphones. Gallup also uses address-based sampling methods to recruit Panel members. The Gallup Panel is not an opt-in panel. The sample for this study was weighted to be demographically representative of the U.S. adult population, using the most recent Current Population Survey figures. For results based on this sample, one can say that the maximum margin of sampling error is ±9 percentage points at the 95% confidence level. Margins of error are higher for subsamples. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error and bias into the findings of public opinion polls.

For this study, the American investor is defined as an adult in a household with stocks, bonds or mutual funds of $10,000 or more, either in an investment account or in a self-directed IRA or 401(k) retirement account. About two in five U.S. households have at least $10,000 in such investments. The sample consists of 68% non-retirees and 32% retirees. Of total respondents, 39% reported annual incomes of less than $90,000; 61% reported $90,000 or more. The Wells Fargo/Gallup Investor and Retirement Index is an enhanced version of Gallup’s Index of Investor Optimism, which provides the historical trend data. The median age of the non-retired investor is 44 and the retiree is 68.

The Index of Investor Optimism has an adjusted baseline score of 100 from when it was established in October 1996. It peaked at +152 in January 2000, at the height of the dot-com boom, and hit a low of -81 in February 2009.

About Wells Fargo Private Wealth Management

Wells Fargo Private Wealth Management, the fourth largest wealth management provider in the United States (Barron’s 2018), offers a full range of financial services and products to help individuals and families build, manage, preserve and transfer their wealth. The Private Bank and Abbot Downing service clients across North America and internationally with $155 billion in assets under management (9/30/19).

About Wells Fargo

Wells Fargo & Company (WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,600 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 32 countries and territories to support customers who conduct business in the global economy. With approximately 263,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2019 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Cautionary Statement about Forward-Looking Statements

This news release contains forward-looking statements about our future financial performance and business. Because forward-looking statements are based on our current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the “Forward-Looking Statements” discussion in Wells Fargo’s most recent Quarterly Report on Form 10-Q as well as to Wells Fargo’s other reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, available on its website at www.sec.gov.

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