18% of private investors predict stock market contraction in the next three months

Just 18 % of private investors expect the stock markets to decline in the next three months. This makes them the most optimistic they have been since the end of September 2017, according to a new infographic from Block-Builders.de. The study also reveals that a similar level of optimism amongst international fund managers for the stock market in the year 2021.

Just under half of German private investors expect to see bullishness on the stock market in the next 3 months. Meanwhile another 25% consider a sideways movement to be more realistic.

A whopping 84% of fund managers forecast corporate profits to rise again quickly, despite the fact that the Corona crisis still dominates much of everyday life. As the infographic shows, the cash ratio of professional investors has fallen to just 4.1%, while the equity ratio remains comparatively high.

In spite of this widespread optimism, fund managers also identify certain potential risk factors for stock market performance. In addition to Covid19 , these include the trade dispute with China, the danger of a currency war or the possibility of a tech bubble bursting.

Irrespective of uncertainties in the face of the pandemic, asset managers expect major benchmark indices to strengthen in 2021.

The DAX, for example, is expected to rise by 7.5%, even more than the S&P 500, while the average price forecast for the Shanghai Composite is up 13.7% on its current level.

“Despite the crisis, both private and professional investors are confident about the outlook for the stock market in 2021,” explains Block-Builders analyst Raphael Lulay. “They anticipate particularly strong price increases from listed companies in Asia”.