11 months ago • 1 min
Big money managers are feeling less pessimistic (or, is it more optimistic?) about the economy, according to Bank of America (BofA)’s January Global Fund Manager Survey. The monthly survey gauged responses from over 250 institutional investors, collectively managing over $700 billion in assets.
This chart shows the percentage of fund managers who said there’d be a recession in the next 12 months. And while a big chunk of them (68%) say they still see one in the cards, that’s down from 77% in November’s survey. In other words, November was (so far, at least) the peak of recent economic dread. Now, the recent recession worries never reached as high as they did in March 2009 (global financial crisis) or April 2020 (Covid crisis). But looking back, those earlier peaks would each have been fantastic times to buy stocks – you’d have pretty much bought the bottom of each crisis.
And it makes sense when you think about it: markets are forward-looking, meaning they tend to react more to future economic expectations than what is actually going on at the time. So in the case of the last two crises, as soon as those recession expectations started to ease off, investors started bidding up stock prices.
The S&P 500 is currently sitting at about the same level it was during the November survey. So if you think November really was the peak of economic concern, then you’ve got a good reason to consider buying stocks now. And if you’re wondering what fund managers were thinking when stocks started rebounding last October, I wrote all about that here.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
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