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Majority of Investors’ Outlook on Market Affected by Current Political Climate

This week’s Sentiment Survey special question asked AAII members what factors are affecting their six-month outlook for stocks right now. Nearly six out of 10 respondents (57%) said politics, or something directly related to politics. Nearly one out every five respondents (19%) specifically mentioned President Donald Trump. Frustration with the administration and/or Congress as well as concern about or hope for progress on tax reform were frequently mentioned. Outside of politics, the high valuations for stocks were cited by 12% of respondents. Approximately 6% of respondents expect stock prices to decline and/or are concerned about how long the bull market has lasted. Nearly 9% discussed interest rates and monetary policy, while 8% described themselves as being encouraged by ongoing economic growth. Many respondents listed more than one factor in their answers.

Here is a sampling of the responses:

  • “The current administration’s and Congress’ dysfunction.”
  • “Continued good earnings reported by most companies.”
  • “Expect a correction that is long overdue.”
  • “High valuations; great uncertainty regarding tax cuts and infrastructure investment.”
  • “Inflation and interest rates remain low.”

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