How have expectations of market returns and economic growth evolved with the Covid-19 crisis? Expectations about rare disasters? What about trading in equity and bonds? Some answers from our latest research with @stroebel_econ @StefanoGiglioEc Stephen Utkus @Vanguard_Group (1/7)
Expectations about stock market returns over the next year jumped down from 6% to about 1-2% (2/7)
Expectations about real GDP growth also went down, and kept going down in April (average annual real growth rate of GDP over next three years) (3/7)
The probability of experiencing an economic disaster spiked up (4/7)
But expectations for long-run (10 years) economic growth and stock market returns remained stable or improved (5/7)
Households who in February, before the crash, were the most optimistic turned more pessimistic after the crash and sold some of their equities. Ex-ante pessimists did not move their portfolio much. (6/7)
Surveys are administered to U.S. clients of Vanguard and the trading refers to respondents with retail investment accounts. More details and analysis in our working paper:
…https://matteomaggiori.s3.us-east-2.amazonaws.com/GMSU_Covid19.pdf

More details and results also in our earlier work:
…https://matteomaggiori.s3.us-east-2.amazonaws.com/GMSU_Vanguard.pdf
(7/7)
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