Morgan Stanley Wealth Management Pulse Survey Reveals Investors Remain Optimistic for 2023 Despite Dim Near-Term Views

Investors still see opportunity for a soft landing and expect the economy to be in better shape by year end

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley Wealth Management today announced results from its quarterly individual investor pulse survey:

• Bearish views remain. More than half (52%) of investors said they were bearish this quarter, down slightly (3%) from last quarter. And the majority (89%) of investors expect volatility to sustain or increase this quarter.
• Inflation and recession fears are top of mind. Even though more than half of investors (55%) believe inflation has peaked and will begin to slow, nearly two in three (64%) said they think it is the biggest risk when it comes to their portfolio. Recession risk (49%) and market volatility (44%) rounded out the top three.
• Though less believe we are in a recession. More than one in three (40%) of investors said they believe we are currently in the recession stage of the business cycle, 5 percentage points less than last quarter.
• And many believe in a “soft landing.” Over half (51%) of investors said the Fed will be able to steer the economy into a soft landing, and nearly two in three (64%) said the U.S. economy will be in better shape than it currently is by the end of this year.

“It’s been a challenging market environment as investors navigate through high inflation, geopolitical concerns, and recession fears,” said Mike Loewengart, Head of Model Portfolio Construction for Morgan Stanley Portfolio Solutions. “While these challenges aren’t likely to disperse anytime soon, it’s important for investors, where appropriate, to remain committed to their plan and consider the diversification of their portfolio. Moving money to the sidelines may sound tempting, but for investors with a lengthier time horizon, staying the course may be beneficial in the long run.”

The survey explored investor views on sector opportunities for the first quarter of 2023:

• Energy – Amid geopolitical concerns and hopes of a China rebound, half (50%) of investors see more opportunity in this volatile but top performing sector of 2022.
• Health care – Many investors (40%) see opportunity in this historically defensive sector as they look to shore up their portfolios.
• IT – Over one in three (35%) investors may see a bargain opportunity in IT amid rising rates typically weighing on tech stocks and their valuations.

About the Survey

This wave of the survey was conducted from January 3 to January 23 of 2023 among an online US sample of 906 self-directed investors, investors who fully delegate investment account management to financial professionals, and investors who utilize both. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into thirds investable assets: less than $500k, between $500k to $1 million, and over $1 million. The panel is 60% male and 40% female and self-select as having moderate+ investing experience, with an even distribution across geographic regions, and age bands.

About Morgan Stanley Wealth Management

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 41 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

This has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a Financial Advisor.

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Past performance is not a guarantee or indicative of future performance. Historical data shown represents past performance and does not guarantee comparable future results.

This material contains forward-looking statements and there can be no guarantee that they will come to pass.
Diversification and asset allocation do not guarantee a profit or protect against loss in a declining financial market.

This material should not be viewed as investment advice or recommendations with respect to asset allocation or any particular investment.
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© 2023 Morgan Stanley Smith Barney LLC. Member SIPC.

Referenced Data

And when it comes to the current market are you?
	Q4’22	Q1’23
	Total	Total
Bullish	46%	48%
Bearish	54%	52%

Over the next quarter, do you think volatility will...
	Q1’23
	Total
Top 3	89%
Greatly increase	19%
Somewhat increase	40%
Stay the same	30%
Somewhat decrease	11%
Greatly decrease	--

Please rate how much you agree or disagree with the following statements: We have reached the peak of inflation and it will begin to slow.
	Q1’23
	Total
Top 2	55%
Strongly agree	22%
Somewhat agree	33%
Neither agree nor disagree	21%
Somewhat disagree	16%
Strongly disagree	8%

Which of the following risks are you most concerned about when it comes to your portfolio? (Top four)
	Q1’23
	Total
Inflation	64%
Recession	49%
Market volatility	44%
Russia/Ukraine conflict	31%
Fed monetary policy	25%
Supply chain constraints	25%
Economic weakness abroad	23%
US trade tensions	23%
Current presidential administration	22%
Gridlock in Washington	22%
Job market	18%
Commodity prices	17%
Coronavirus and other pandemic concerns	16%
The yield curve	12%
None of these	2%
Other	1%

What stage of the business cycle do you believe we are currently in?
	Q4’22	Q1’23
	Total	Total
Recession (Economic growth decreases)	45%	40%
Peak (Economic growth reaches maximum limit, inflation takes hold, economic factors slow or stop)	21%	21%
Expansion (Economic growth is steady and economic factors increase)	19%	19%
Recovery (Economy growth reaches lowest level and begins to move back into positive territory)	7%	11%
Trough (Negative economic growth)	8%	8%

Please rate how much you agree or disagree with the following statements: The U.S. economy is healthy enough for the Fed to enact additional rate hikes this quarter.
	Q1’23
	Total
Top 2	51%
Strongly agree	21%
Somewhat agree	30%
Neither agree nor disagree	23%
Somewhat disagree	18%
Strongly disagree	8%

Please rate how much you agree or disagree with the following statements: The U.S. economy will be in better shape than it currently is by the end of this year.
	Q1’23
	Total
Top 2	64%
Strongly agree	26%
Somewhat agree	38%
Neither agree nor disagree	17%
Somewhat disagree	12%
Strongly disagree	7%

What industries do you think offer the most potential this quarter? (Top three)
	Q1’23
	Total
Energy	50%
Health care	40%
Information technology	35%
Utilities	31%
Financials	30%
Real estate	27%
Consumer staples	24%
Communication services	18%
Industrials	18%
Materials	18%
Consumer discretionary	9%

 

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Media Relations Contact: Daniel Fay, Daniel.Fay@morganstanley.com

Source: Morgan Stanley