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Bullish Forecast for U.S. Stocks: Investors Predict 5.5% Yearly Return


According to a recent survey conducted by Vanguard, investors have expressed their optimism for the U.S. stock market. It is the most bullish forecast since the bear market of 2022.

Compared to the April numbers, investors now anticipate a 5.5% increase in U.S. stocks over the next 12 months, up from the previous expectation of 3.7%. This marks the highest reading since December 2021 when a 6% forecast was made, just before the S&P 500 index reached a record high in January 2022. Unfortunately, following that peak, the index experienced a decline of at least 20%, meeting the widely accepted criteria for a new bear market.

“Investors are voicing their confidence in the ongoing stock market rally,” says Tom De Luca, a senior researcher in Vanguard’s Investor Behavior Group. “Short-term optimism is currently at its highest level since December 2021, right before the start of the 2022 bear market.”

The survey collected responses from approximately 2,000 Vanguard personal and 401(k) investors, presenting a diverse range of perspectives.

This increased optimism is fueled by the series of new highs the stock market has been achieving this year. Furthermore, the highly anticipated U.S. recession seems to be kept at bay, and major banks have begun reporting second-quarter earnings with better-than-expected results.

It is noteworthy that the survey also revealed that investors expect a 7.1% return on stocks over the next 10 years – the same projection as April.

As of Wednesday, stocks continued to advance, with all three indexes reaching fresh one-year highs. Both the Dow Jones Industrial Average and S&P 500 are now less than 5% below their record closes in January 2022. The Nasdaq Composite Index, on the other hand, is 10.6% off its record finish on November 21, 2021.


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