Bullish Advisor Sentiment Collides With Market Volatility

Financial advisors started the second half in a bullish mood, expecting further gains by the S&P 500 through year-end and outperformance by the Magnificent 7 tech stocks, according to an InspereX’s pulse survey conducted between July 8 and July 15.

Advisors’ mood darkened on August 5 when global markets plummeted, with losses swamping tech stocks.

“While we can’t speculate on what advisors might be thinking about today, the jury is still out as to where markets will end the year,” Chris Mee, managing director at InspereX, said in a statement. “Clearly, advisors’ top concern was volatility, which came to fruition in the past week.” 

Indeed, 31% of advisors in the survey reported that market volatility was also their clients’ main worry.

Mee said now it is important for advisors to communicate with clients to help reinforce their focus on long-term objectives and remind them of the importance of diversification and the benefits of downside protection.

Advisors said clients were also worried about the U.S. presidential election and inflation. For their part, advisors’ chief concerns after market volatility are inflation and interest rates. Only 9% of advisors said they worried about the November election.

Bullish Expectations

Red Zone Marketing conducted the pulse survey between July 8 and July 15 among 487 advisors who work at independent broker-dealers, RIAs, banks, regional firms and wirehouses. During the survey period, the S&P 500 hit a high of 5,666.94, and closed July 15 at 5,631.22.