Advisors bullish on equities, online survey suggests

(May 22, 2003) Canada’s financial advisors expect a summer stock market rally and are adjusting their asset allocations to reflect that, according to a survey conducted earlier this month by The ADVISOR Group.

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Nearly 80% of advisors responding to an online poll said they expect stock prices to rise in the next three months. That’s the strongest showing in the stock category since the monthly online polls began in February 2003. Only 3% said they expected a market decline this summer.

Conversely, 60% of advisors expect bond prices to fall, up from around 50% in April 2003.

Advisors are also changing their asset allocations in anticipation of rising stock prices. The current recommendation is 62% equities, 27% fixed income and 11% cash. That’s a shift from April, when the recommendation was 57% equities, 30% fixed income and 13% cash.

About half of respondents expect interest rates to remain the same this summer. In April, about two-thirds of advisors predicted an interest rate increase. The Bank of Canada did not disappoint and hiked its key lending rate 25 basis points to 3.25%. The next interest rate announcement is June 3.

About 200 advisors responded to the online poll, promoted in Advisor.ca’s daily e-mail bulletins. This is the fourth month of polling. Similar surveys will be conducted each month and the results will be compared to past polls. (To register for our daily A.M. or P.M. bulletins, click here.)

What do you think of the results in this month’s ADVISOR Omnibus survey? Are they consistent with what you feel is the general feeling in your industry right now? Share your thoughts or ideas with your fellow advisors in the “Free for All” forum of the Talvest Town Hall on Advisor.ca.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca