Investors are not happy
In fact, 73 percent of them are pessimistic about the long-term future of the U.S. economy, according to John Hancock's Investor Sentiment Survey. But money managers feel very differently. Seventy-nine percent of managers surveyed by Russell Investments said they don't believe we're headed for a double-dip recession, citing strong corporate balance sheets and high corporate profit levels as the top reason. Rachel Carroll, client portfolio manager at Russell, says that while the negative press has made investors nervous, managers are looking closely at companies' fundamentals, and they like what they see. These managers have long histories and have lived through many market downturns, and they expect the market to swing back the other way, as it did following the 2008 crash when many investors missed out on the upside. In fact, 57 percent of managers surveyed view the U.S. equity market as undervalued, up from 26 percent in June. “Russell believes this strong undervaluation sentiment indicates that professional money managers do not anticipate any immediate economic disasters but attribute market volatility to widespread investor nervousness,” the study said.