Two Out of Five Investors Expect a Bear Market Within the Next Few Years

Given the 10th anniversary of the bottom of the 2007–2009 bear market, this week’s Sentiment Survey special question asked AAII members how worried they were about another severe bear market occurring within the next few years. Nearly two out of five respondents (39%) describe themselves as being worried about a big drop occurring. High levels of public and private debt, the duration of the current bull market, trade policies and politics (both domestic and global) are cited as reasons why. Slightly more than 15% of respondents think the next market drop will not be as severe as what occurred during the financial crisis while 7% anticipate a recession, particularly after the 2020 elections. Nearly 23% are not worried about a significant drop occurring.

Here is a sampling of the responses:

• “Very worried. The debt of the government and companies is too high. The economy will crash eventually.”
• “I am not very worried. I expect a downturn, but not a severe one.”
• “I am not worried. The economy is in pretty good shape and the Federal Reserve is taking a wait and see approach.”
• “I doubt there will be as severe of a bear market, but I do expect that slow growth and a mild recession could easily happen.”
• “Moderately. The presidential election cycle causes uncertainty and a 10-year-old bull won’t need much to get derailed.”

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