Investment Return Expectations differ significantly between financial professionals and investors.
Based on the Natixis Y2023 investors’ survey, over the long term, individual investors expect average investment returns of 12.8%, while financial professionals expect 9.0%.
🔹 As a reference point, on average, the S&P 500 has returned 10.4% annually between 1924-2023.
🔹 The expectation gap differs in each country, with the highest gaps in developed markets – the United States, Australia, Hong Kong, and Japan.
🔹 European investors have some of the lowest return expectations amid dismal sentiment and disappointing economic data.
Compared to the Y2022 survey, the global gap between what investors want and what advisors say is realistic has narrowed from 61% in 2022 to 42% in 2023.
The expectation gap could be due to “time in the market”, different understanding of the markets, access to more information, or higher risk tolerance.
Overall, individual investors are generally more optimistic about future investment returns than financial professionals. 44% of individual investors admitted that they take on more risk than they should to get better returns.
Source: Natixis & Visual Capitalist
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