Investors are feeling more optimistic than they have in years but remain concerned about stagnant income, according to a survey conducted by Wells Fargo & Co. and Gallup.
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The Wells Fargo/Gallup Investor and Retirement Optimism Index jumped to 46 in the third quarter, its highest level in seven years, with much of the gains stemming from investors' heightened optimism about economic growth and the labor market, according to the survey. However, six in 10 of those surveyed said they are doing no better financially than they were five years ago, signaling limited progress during the U.S. economy's gradual recovery.
The quarterly survey measures the perceptions of more than 1,000 U.S. investors with $10,000 or more in investible assets.
Investor optimism also still remains well below its pre-2008 recession average, with investors still skeptical about growing their savings in the stock markets and about their ability to increase their income.
The majority of nonretired investors expect their income to be stagnant, as 61% of nonretirees with $100,000 or more in assets said they don't foresee a time when their income will be significantly higher than it is today.
"Investors are saying they're more optimistic about the economy and the job market. But nonretirees worry about their ability to earn more in their lifetime," said Karen Wimbish, director of retail retirement at Wells Fargo. "Clearly, average investors have not forgotten their recession experiences."
In addition, investors remain wary of the stock market, with 60% saying caution toward investing in the market is "wise" since it protects them from possible market losses. The majority, however, still actively choose stocks for their long-term investment accounts, with just 29% avoiding stocks in long-term accounts.