A new Franklin Templeton survey found that globally investors are optimistic about 2013, but are still wary of the potential for risk.
Over 60% of investors globally expect their local stock market to be up in 2013. Investors in emerging markets were even more optimistic -- the survey found that 66% expect their local stock market to produce gains.
With the expectation that the markets will be up comes the expectation of returns. Investors in emerging markets expect 12% return from their investments in 2013. In developed markets investors expect a 7% return. Both groups think the future is bright. Investors in developed markets expect a 10% return in the next decade while investors in emerging markets expect 18%.
European investors feeling the lingering effects of the debt crisis were less optimistic, with 49% expecting the stock market to be up in 2013. Those expecting the market to be up are predicting a 6% return.
The survey found that despite investors’ rosy outlook, they are still being conservative with their investments: 40% of investors will be slightly more conservative, taking on moderately lower risk to avoid potential losses and 17% of investors will be much more conservative taking on significantly lower risk to avoid potential losses. Only 31% of investors are open to taking on more risk for the potential of higher returns.
The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, included responses from 9,518 individuals in 19 countries: Brazil, Chile and Mexico in Latin America; Australia, China, Hong Kong, India, Japan, Malaysia, South Korea and Singapore in Asia Pacific; France, Germany, Italy, Poland, Spain and the UK in Europe, and the United States and Canada in North America. Survey respondents were between the ages of 25 and 65 in Latin America and Asia Pacific and 25 and older in Europe and North America. Respondents were required to own investable assets, such as stocks, bonds, mutual funds, etc. In addition, a minimum investable asset threshold was set for each country to ensure that the respondent had sufficient investments, providing a knowledge base from which to answer the survey questions. Surveys were completed from January 14 to 25, 2013, in all countries.