Americans see end of stock surge: AP-GfK poll

Americans aren't expecting another bang-up year for the stock market, according to a new Associated Press-GfK poll.
Of the people polled, 40 per cent think the market will stabilise where it is now by the end of 2014, with 39 per cent predicting that it will drop, but not crash. Only 14 per cent believe the market will rise and 5 per cent think it will crash.
The Standard & Poor's 500 index has surged 24.5 per cent to 1,775 in 2013, putting it on track for its best year in a decade.
The rally has been fuelled by higher corporate earnings, a slow but steady recovery in the US economy and stimulus from the Federal Reserve.

Perhaps because of the slow recovery, only about half of the general public noted the market's strong performance, according to the poll. Investors were more aware of the booming market, however, as 73 per cent say it improved.
William Leyser, 74, a retired machinist from Las Vegas, thinks the stock market may fall by as much as 10 percent next year. He has taken some of his money out of stocks this year and put it into bonds.

"I'm concerned there is going to be a big correction here," says Leyser, who invests in mutual funds. "When it gets high, it always goes down a little bit."

The poll also shows that individuals are less optimistic about the outlook for the stock market than many investment professionals.
While few market strategists expect stocks to keep climbing at the same pace, many see them extending their gains at a slower rate. Bank of America Merrill Lynch predicts the S&P 500 index will end next year at 2,000, about 13 percent higher than its current level. Wells Fargo Advisors forecasts the index will climb as high as 1,900, a gain of about 7 per cent.
Stocks have rallied since bottoming out after the financial crisis and the start of the Great Recession, lifting the S&P 500 index 162 per cent from its low in March 2009. Despite those steady returns, the poll suggests that Americans are still nervous about buying and holding stocks.

Of those polled, 71 per cent consider investing in the stock market to be "generally risky," compared with 27 per cent who think of the market as "generally safe."
The perception of stocks as a risky investment has lessened since the spring, when 75 percent of respondents said it was "generally risky" and 18 per cent said it was "generally safe."
Still, with interest rates on savings accounts low, some individual investors recognise the need to take on more risk. "If you want to see some growth in your portfolio you have to go into equities," says Mark Geduldig-Yatrofsky, 64, a former IT worker who lives in Portsmouth, Virginia.

Overall, 20 per cent of investors say they plan to invest more heavily in the market in the coming year, 22 per cent will pull back, and 57 per cent plan to invest at about the same level as in 2013.