Rich investors remain confident amid perceived risks.
Results from a survey conducted by E-Trade Financial reveal that most American investors with over $1 million in investments think that the US stock market is headed towards a potential bubble situation, if it’s not already in one.
Based on the survey, 16% of investors see the market as already in a bubble, 46% believe it’s somewhat in a bubble, 29% anticipate a bubble forming soon, and only 9% think there’s no bubble on the horizon. Normally, when concerns about a market bubble surface, investors tend to play it safe by withdrawing some investments and consolidating their capital. In a surprising turn of events, many of these wealthy investors are continuing to invest extensively.
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Investors surveyed by E-Trade have indicated that their risk appetite increased in the first quarter of 2021, with many expecting considerable profits by the end of Q1. Instead of focusing on the current market situation, these investors are looking ahead optimistically, encouraged by the COVID-19 vaccine distribution and President-Elect Joe Biden’s proposed third stimulus package.
“There is a growing realization of an improving economy and indications that market conditions are favorable for further growth,” said Mike Loewengart, the chief investment officer at E-Trade Financial’s capital management unit.
