The Bank of New York Mellon (BK) just conducted an investor survey by its wealth management division, finding that “Bleak is the New Black.” In other words, it’s fashionable for Americans to be gloomy about the financial markets. BNY Mellon found that over 60% of Americans are pessimistic these days.
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If the survey was conducted a year or two ago, you could understand the pessimism. But what’s startling about this BNY Mellon investor survey is that it comes as the Nasdaq is above 3,000, challenging dot-com era highs, and the Dow and S&P 500 are both approaching levels not seen since 2007.
According to the survey, nearly half (48%) of American investors “believe they will run out of money at some point in their lifetime. This is up sharply from just 30% who felt this way 10 years ago.
Also disturbing is that 61% of investors are pessimistic about the market, while only 39% are optimistic. Furthermore, 59% are waiting for improvements in the market to take action — signaling a painful inertia among traders.
“When it comes to how investors feel about the financial markets, you could say that bleak is the new black,” said Larry Hughes, CEO of BNY Mellon Wealth Management. “Many people are so negative about the markets that they find it hard to believe that something could possibly go right. We maintain that compelling investment opportunities still exist – that is, for those ready to take action.”
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The upcoming presidential election in November, along with debt debates at home and in Europe, are certain to keep things shaky for investors in the short-term. Throw in geopolitical unrest in North Africa and the Middle East, driving up oil prices and raising the specter of war, and you have a volatile mix of headlines that would scare anyone.
But does this man you should sit out the market? Maybe, but maybe not. After all, you want to buy low and sell high — and if you wait for a recovery you may have missed the biggest gains in the market. Not everyone can call a bottom perfectly, but it’s important to not let fear paralyze you.
“Shares in a number of U.S. companies are still very reasonably valued on many historical metrics. And with the sell-off in emerging markets equities last year, we’ve been seeing opportunities in certain geographies and sectors.” he said. “From high yield bonds to emerging market debt to strong dividend stocks, opportunities for yield exist outside the traditional fixed income sources in this market. Challenging markets can often provide the most promising investment opportunities.”
In short, there are opportunities out there if you know where to look.