Investors don’t see it coming,
despite a nearly 10-year run and a recent spate of market volatility. But if
the bull market comes crashing down, it’s going to find lots of investors taken
According to the annual Legg Mason
Global Investment Survey,
close to half of investors say they intend to boost active fund allocations
over the next five years, and 66% of respondents say they expect U.S. equity
markets to rise over the next 12 months; 29% predict a significant increase.
And optimism reigns; overall, 69%
said they are “confident” about their investments over the next 12 months, with
28% reporting being “very confident.”
Holdings are diverse, but investors
report owning 27.6% equities; 22.2% cash; 21.2% fixed income; 12.6% real
estate; 10.7% alternatives; and 5.7% gold/metals.
Nobody reported owning
cryptocurrencies, and this was the first year that the survey inquired about
them. But 28% of millennials said they were among the best ways to invest.
The home-market prejudice reigns,
with investors more likely to stick with U.S. equities than to venture abroad
to sample international and emerging markets. When making investment decisions,
only 8% said that country or region was on their radar — at the very bottom of
However, “Investors also should bear
in mind that 75% of global GDP comes from outside the U.S.,” Elisa Mazen,
portfolio manager of the Legg Mason-affiliated ClearBridge International Growth
Fund, says in a statement.
Mazen adds, “We can access great
minds, technology innovation, attractive demographics, growth rates and
valuations in many regions. This can bring opportunity for sustainable
Investors are also favoring active
over passive investments, with millennials in particular saying they have 60%
allocated to active strategies.
Millennials also report pain from
the financial crisis, with 56% saying that their decision-making is affected by
that period. Unlike other generations, millennials tend to hold more assets in
cash than in equities.
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