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2020 VISION: Time to Take Stock

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PERCEPTION VS. REALITY: Has investor perception of market direction been influenced by recent dramatic events?

Reality: How the Market Performed

S&P 500 Annual Returns1 vs. Percentage of Investors Who Said the Market Was Down or Flat.

What did the survey participants say? Survey Answer: the market was down or flat This chart is for illustrative purposes only and does not reflect the performance of any Franklin, Templeton or Mutual Series fund. Past performance does not guarantee future results.
The chart illustrates the gap between investor perceptions and actual market performance. The S&P 500 Index was down dramatically in 2008 and that may have impacted the perceptions of market performance in 2009, 2010, 2011 and 2012 by participants in Franklin Templeton's annual Investor Sentiment Survey2,3,4,5

For more on the investor behavior of Availability Bias, see Does "Shark Week" Increase Shark Attacks?

WHAT SHAPES YOUR PERCEPTION OF THE MARKET?

Certainly there's been no shortage of troubling, dramatic events in recent years. From the Lehman Brothers bankruptcy to the Madoff scandal to the Gulf oil spill to the Japanese tsunami...it's understandable that investors might feel the hit parade of disheartening news isn't going to let up.
 

It's time to take stock of your perception of the market. Is it grounded in the reality of data or is it being shaped by negative headlines? If you've pulled back from equities in recent years, talk to your advisor about whether it's time to step back into the stock market.

  1. Step

    For those still not sure about the stock market.

  2. Walk

    For those who are nervous about timing their re-entry.

  3. Sprint

    And for those ready to "sprint" back into the stock market, there may be some attractive opportunities.

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    A brief overview of 2020 Vision: Time to Take Stock

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1. Source: © 2012 Morningstar. All right reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Indexes are unmanaged and one cannot invest directly in an index.

2. Source: 2010 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 1,010 telephone responses from participants age 18 and older in the U.S. from March 25, 2010 to March 28, 2010.

3. Source: 2011 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 1,049 online responses from participants age 18 and older in the U.S. from January 6, 2011 to January 7, 2011.

4. Source: 2012 Franklin Templeton Global Investor Sentiment Survey designed in partnership with Duke University professor Dan Ariely and Qualtrics. Included 1,142 online responses from participants age 18 and older in the U.S. from January 30, 2012 to February 13, 2012.

5. Source: 2013 Franklin Templeton Global Investor Sentiment Survey designed in partnership with ORC International. Included 501 online responses from participants age 18 and older in the U.S. from January 14, 2013 to January 25, 2013.


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