- 76% of U.S. retail investors plan to increase or maintain their investment portfolio contributions.
- Investors are prioritizing opportunities in growth sector stocks (technology, healthcare, etc.), cash, bonds and dividend yielding stocks as interest rates fall.
- Inflation remains the primary fear , followed by the state of the US economy, and high interest rates.
- 59% of retail investors expect the price of AI stocks to increase over the next year, yet only 22% of investors are currently holding AI related stocks.
Wednesday, January 15, 2025 – As interest rates begin to decline, American retail investors plan to strategically adjust their portfolios, prioritizing growth sector stocks such as healthcare & technology (24%), cash assets (22%), high-yield bonds (18%), and dividend yielding stocks (18%)according to data from the latest Retail Investor Beat (RIB) from trading and investing platform eToro. 76% of retail investors intend to either increase or maintain their investment contributions, despite ongoing concerns about inflation and the potential for a recession.
The study, which surveyed 1,000 retail investors across the United States, highlights a strong focus on sectors and assets that are expected to perform well in a lower-rate environment. While the focus on high growth sectors are the top priority for Millennials, Gen X and Boomer investors, Gen Z plans to focus on cash assets (39%) and high-yield bonds (36%) in the current environment. Meanwhile investors of the Silent Generation intend prioritizing dividend yielding stocks for the purpose of steady income (23%).
Investor allocations amid declining interest rates
| Age Group | Growth Sector Stocks | Cash Assets & Savings Accounts | High-Yield Bonds | Dividend-Yielding Stocks | Cryptoassets |
| Overall | 24% | 22% | 18% | 18% | 16% |
| Generation Z
(ages 18-27) |
27% | 39% | 36% | 9% | 21% |
| Millennials
(ages 28-43) |
37% | 34% | 23% | 20% | 30% |
| Generation X
(ages 44-59) |
28% | 21% | 17% | 21% | 24% |
| Baby Boomer
(ages 60-78) |
17% | 13% | 14% | 16% | 4% |
| Silent Generation
(ages 79+) |
8% | 17% | 13% | 23% | 2% |
Commenting on the data, eToro Investment Analyst Bret Kenwell said: “After back-to-back years of strong equity performance, retail investors are looking to balance risk vs. reward. It’s clear that investors still want to allocate toward growth holdings and cryptoassets, but at the same time, they continue to take advantage of elevated interest rates and are putting themselves in a good position to buy the dip. While it’s somewhat surprising to see Gen Z put such a large emphasis on cash and bonds, remember that many in this age group may be saving for large life expenses.”
While reports have shown inflation is cooling, 24% of investors cited it as the biggest threat to their portfolios in 2025, followed closely by the state of the US economy with the fear of a recession (23%), and high interest rates (10%). These factors are influencing the investment decisions of many Americans, as they seek to protect and grow their assets in a fluctuating economic environment.
The optimism surrounding AI stocks further underscores the belief in technological advancements as key drivers of economic growth, with 59% of investors believing that AI stock prices will increase over the next year. However, only 22% of investors are already invested in AI related stocks, a significant decline from 35% last quarter. This could be due to a mix of profit-taking, as leading stocks like NVIDIA hit all time highs at the beginning of Q4, and de-risking ahead of the US election. That said, 33% of investors plan to invest in AI in the future.
Kenwell adds: “It’s interesting to see that a majority of retail investors expect AI stocks to go higher in the coming year, but less than a quarter of those surveyed had positions in these names. It underscores investors’ patience with these stocks, many of which had lofty gains over the past 12 months. Perhaps this is one key area retail investors may focus on when it comes to buying the dips in 2025.”
ENDS
Notes to editors
About this report
The latest Retail Investor Beat was based on a survey of 10,000 retail investors across 12 countries and 3 continents. The following countries had 1,000 respondents: UK, US, Germany, France, Australia, Italy and Spain. The following countries had 600 respondents: Netherlands, Denmark, Poland, Romania, and the Czech Republic. The survey was conducted from November 18 – November 28, 2024 and carried out by research company Opinium. Retail investors were defined as self-directed or advised and had to hold at least one investment product including shares, bonds, funds, investment ISAs or equivalent. They did not need to be eToro users.
Media contacts
pr@etoro.com
ellendi@etoro.com
About eToro
eToro is the trading and investing platform that empowers you to invest, share and learn. We were founded in 2007 with the vision of a world where everyone can trade and invest in a simple and transparent way. Today we have over 38 million registered users from 75 countries. We believe there is power in shared knowledge and that we can become more successful by investing together. So we’ve created a collaborative investment community designed to provide you with the tools you need to grow your knowledge and wealth. On eToro, you can hold a range of traditional and innovative assets and choose how you invest: trade directly, invest in a portfolio, or copy other investors. You can visit our media centre here for our latest news.
DISCLAIMER
Securities trading is offered by eToro USA Securities Inc., member of FINRA and SIPC, a self-directed broker-dealer that does not provide recommendations or investment advice. Options involve risk and are not suitable for all investors. Please review Characteristics and Risks of Standardized Options prior to engaging in options trading. Content, research, tools, and stock symbols on eToro’s website are for educational purposes only and do not imply a recommendation or solicitation to engage in any specific investment strategy. All investments involve risk, losses may exceed the amount of principal invested, and past performance does not guarantee future results. Cryptotrading is offered by eToro USA LLC. This entity is not a registered broker-dealer or FINRA member and your cryptocurrency holdings are not FDIC or SIPC insured. Visit our Disclosure Library for additional important disclosures including our Customer Relationship Summary. FINRA Brokercheck © 2023