Coronavirus Anxiety Hits Wealthy Investors Who Remain Pessimistic About Stocks And U.S. Economy

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Wealthy investors are concerned about COVID-19 and its short-term impact on markets, yet remain optimistic about the long-term economic outlook

Despite these concerns, investors remain resilient in their long-term economic optimism, with 66% of investors optimistic about the U.S. economy in the long run in January and even more, 77%, feeling that way in late March, with an ensuing drop in pessimism from 14% to 8%.

This strategy squares well with what some of Wall Street’s big shots are saying, Billionaire investoron Friday that he believes the market has hit a bottom after weeks of economic turmoil as a result of the pandemic. Advisors have been preaching the patient approach since the beginning of the economic instability following the market high in mid-February. Buyers saw gains last week with the Dow and S&P 500 up 12.8% and 10.3%, respectively, marking the best week for either in more than a decade and, for the Dow, dating back to 1938. Following an unprecedented descent into a bear market, these quick gains technically qualified as a return to a bull market.

Hands-off investing has been the trend over the past decade with index funds routinely beating out active investment. Berkshire Hathaway’s Warren Buffett won a bet against hedge fund investor Ted Seides when the S&P 500 returned 8.5% annually over the ten-year stretch from 2005 to 2015, with Seides unable to find a hedge fund producing better returns.

 

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My thoughts and prayers go out to the wealthy

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