Practical analysis for investment professionals
09 May 2013

Poll: What Poses the Greatest Threat to Global Equity Markets?

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?

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.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

1 thought on “Poll: What Poses the Greatest Threat to Global Equity Markets?”

  1. Joseph Hutton says:

    Interesting poll.In my opinion energy production is the backbone to all economic growth. I would like to see what people think about that, maybe reason middle east tensions concerning people?

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