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Investors bothered but bullish
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October 16, 1998: 3:14 p.m. ET
CNNfn poll shows many U.S. investors staying in the market despite concerns
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NEW YORK (CNNfn) - Worried and bullish -- that's the position a majority of American investors are taking when it comes to the U.S. economy and its turbulent reflecting pool, the financial markets.
At least that's the way things look according to preliminary results of an informal CNNfn poll, "Investing in Troubled Times." The poll was launched Tuesday after the Dow closed down 63 points to 7,938 and the Nasdaq shed 36 points to finish at 1,509.
Of the roughly 7,800 people who responded, nearly seven out of 10 said they were more worried today about the state of the U.S. economy than they were six months ago.
Yet when asked about their investments and predictions for the market, nearly the same number said the largest allocation in their portfolios is in stocks and mutual funds, and a roughly equal number reported they had not made any big changes in their allocations in the past month.
In other words, most respondents have been holding firm to their earlier investment decisions, undaunted by the market's volatility.
For those who said they have made major changes -- approximately 31 percent of all respondents -- roughly three out of 10 reported having moved their holdings out of stocks and into CDs or money-market funds. But nearly an equal number said they had done exactly the reverse.
And more than half of all respondents said that if the Dow were to fall another 10 percent this year from Tuesday's closing level of 7,938, they would buy stocks. Another 39 percent said they would hold.
Moderately bullish for year-end
But if nearly half of the poll takers are right, they may not need to make such a decision at all. Almost 50 percent of respondents predicted the Dow Jones industrial average would close the year out between 8,000 and 9,000. Thirty-one percent said the closing range would be between 7,000 and 8,000. Just under 8 percent felt the average would trade in the 9,000-10,000 range or above. Fewer than 1 percent thought the Dow would end the year above 10,000.
As for the Nasdaq Composite's prospects, nearly 60 percent of respondents said they believe it will close out the year between 1,400 and 1,700. (On Tuesday, it finished the day at 1,509.) Another 18 percent predicted a year-end close-out between 1,200 and 1,400. And 16 percent were unabashedly bullish, predicting the composite would rise to between 1,700 and 2,000 or above.
Advice to the Fed
The poll responses reported here were recorded before the Fed on Thursday announced its surprise rate cut, which sent stocks soaring to their third-largest, one-day point gain ever -- 330.58 points, or 4.2 percent.
But judging from poll takers' responses, the majority likely would say the Fed made a move in the right direction. When asked whether the Fed should cut interest rates again this year by a quarter point, 47 percent had said yes. Thirty-one percent recommended a half-point cut, whereas 14 percent thought the Fed should not take any action at all.
Slightly more than 8 percent of respondents opted for a cut of three-quarters of a point or more.
Ah, well. Maybe they'll get their wish between now and Nov. 17, when the Federal Open Market Committee is scheduled to meet again. 
-- by staff writer Jeanne Sahadi
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