Unfortunately, this is rather difficult in practice. There are surveys available, but they are largely useless in my (limited) experience.
At the risk of overrating anecdotal evidence, investors that I am in touch with seem to be pretty pessimistic at the moment. According to my colleague Ben Carlson at A Wealth of Common Sense, who attended the Morningstar Investment Conference in Chicago:
If there was one overarching theme I picked up on from talking to investors and listening to fund managers discuss the markets it’s that just about everyone has lower expectations about financial market returns in the years ahead.
In fact, most were in agreement that we should expect lower stock market returns over the next decade in U.S. markets after the huge run-up in prices over the past few years.
I think this is actually great news for investors. When the popular consensus is that there isn't anything to be worried about - that's exactly when you should be worried. His full post is here.
This reminds me of the 2011 Big Picture Conference which - like 2012 - was full of people who were doom-y and gloom-y on the prospectus for the economic recovery. This isn't to say that these weren't dumb people around the room - quite the opposite! But since such a large part of gauging future returns is understanding investor expectations (thus, what is valued and undervalued at the moment), a group of investment professionals who are extremely cautious and pessimistic on the prospects of high returns means that there is room for any good news or economic surprises to have a positive impact.
We've been fearing a collapse - how many times have you heard the phrase "double-dip recession" - for the past five years and look what has happened. Instead, we've been watching a pretty solid (if painfully slow) economic recovery.
Past performance never indicates future results, but I am glad that investors are worried. I think that's a good sign.
- Bill
