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Investors in June said they expected U.S. stocks to return 5.5% in the next 12 months, their most bullish forecast since the 2022 bear market, according to a Vanguard survey.
That is up from a 3.7% expected yearly increase for stocks as of April, and the highest reading since the 6% forecast in December 2021 (see chart). That was roughly a month before the S&P 500 index
SPX,
hit a record high in January 2022, after which time the index fell at least 20% from its peak, meeting the widely held criteria for a new bear market.
Investors are the most bullish since right before the 2022 bear market.
Vanguard
“Investors are saying loud and clear that they expect the current stock market rally to continue,” said Tom De Luca, a senior researcher in Vanguard’s Investor Behavior Group. “Right now, short-term optimism is higher than we’ve seen since December 2021, right before the start of the 2022 bear market.”
The survey was based on responses from a random sample of about 2,000 Vanguard personal and 401(k) investors.
The increased optimism comes as stocks have been setting a series of new highs for the year, as a highly anticipated U.S. recession stays at bay, and as most big banks kick off second-quarter earnings with better results than expected.
Of note, the June Vanguard survey also pegged 10-year stock-market returns at 7.1%, the same as in April.
Stocks advanced Wednesday, with all three indexes posting fresh one-year highs. Both the Dow Jones Industrial Average
DJIA,
and S&P 500 ended less than 5% below their January 2022 record closes, according to Dow Jones Market Data. The Nasdaq Composite Index
COMP,
finished 10.6% off its record finish on Nov. 21, 2021.
