In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers, “What is the greatest threat to equity markets?”
Poll: What is the greatest threat to equity markets?
As most global stock markets have been on a tear as of late, we thought it would be timely to ask readers what posed the greatest threat to equity markets. Over 37% of the 974 respondents to this poll believe that a global economic slowdown is the greatest risk to stocks.
As leading economic indicators, like purchasing manager surveys, show global economies teetering between expansion and contraction, it’s no surprise that investors are focused on the health of the economy. And since the run-up in stocks is undoubtedly due, in large part, to accommodative central bank policies, it also follows that over 24% of respondents feel that monetary policy will be the most important determinant of the future direction of equities.
Building tensions between North Korea and South Korea, and in the Middle East, may account for the 15% of respondents citing an exogenous systemic shock as their greatest concern. It is somewhat surprising that, with historically mean-reverting profit margins near all-time highs, only 13% of respondents see weakening corporate earnings as the biggest threat to stock prices.
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