Financial advisors are bullish on US equities, with 62% reporting they believe the S&P 500 will rise from now until the end of the year-down from 71% bullish near the markets' peak last October. 42% of the advisors surveyed believe the S&P 500 will rise less than 10%, while 20% of advisors were very bullish, expecting the S&P 500 to rise by more than 10% by the end of the year. The asset classes financial advisors believe will perform best for the remainder of 2008 are commodities (32%) and large-cap US stocks (26%).
The majority of financial advisors, 65%, expect inflation to increase and 54% believe the Federal Reserve will lower short-term interest rates over the remainder of the year. Additionally, 63% of financial advisors are bearish over predictions for US economic growth, with 42% expecting a decrease in gross domestic product growth while 21% expect GDP to go negative, marking a recession.
"After everything that's happened in the markets and with all the talk about recession, it's pretty striking that so many of these advisors remain bullish," said Howard R. Gold, executive editor of MoneyShow.com. "If they're correct, it would be very good news for all investors."
