71% of Investors Expect to End 2012 With Gains: Report
2012/12/04The stock market is poised to start the week much like it did the week before—waiting for politicians in Washington to agree on a plan that avoids a direct hit from the approaching fiscal cliff.
The Dow Jones Industrial Average (DJI) ended last week up 15.9 points, or .12%, to 13,025. The S&P 500 Index (GSPC) gained 7 points last week, ending the weekly session at 1,416.
Related: Politico's Ben White: Get Ready for a Market Rally Because a Fiscal Cliff Deal Is Coming
Retail investors are not panicking because "they are engaged…and staying informed about what's occurring," says Matt Billings, director of trading services at Scottrade, an online retail brokerage firm that also sponsors The Daily Ticker.
As of this weekend, budget talks were still at a stalemate. House Speaker John Boehner said Sunday that Republicans and the president were "nowhere" on a deal while Treasury Secretary Tim Geithner responded that "There's no reason why 98% of Americans have to see their taxes go up because some members of Congress on the Republican side want to block tax rate increases for 2% of the wealthiest Americans."
Billings says these budget issues have energized some active investors. The company's 2012 American Investor Study, based on both clients and non-clients of the firm, found that nearly a quarter of investors believe now is the best time to "get in some great deals."
The study also found that 54% of investors plan to invest additional money in the market. Active investors, defined as those who trade at least 50 times a year, were the most bullish. Seventy-four percent of them plan to invest more funds in the market and 22% plan to keep their investments at the same level. Overall, 71% of investors expect their 2012 portfolios, excluding real estate, to end the year higher compared to 2011.
As far as actual trading goes, Billings says activity picked up after Thanksgiving but overall trading in November was actually flat after rising in previous months. He also said there's been an uptick in demand for technology, telecom and consumer discretionary stocks.
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