6 out of 10 retail investors say they are still on track to achieve their investing goals
- One quarter (24%) of retail investors cited a potential recession as the biggest external risk to their investments in the coming year
- 78% of younger investors between the ages of 18-34 say they’re on track to achieve their primary investing goals; exhibiting higher levels of optimism than their parents’ generation
- 88% of investors acknowledge that emotions or personal experiences influenced recent investment decisions
Wednesday September 27, 2023 – U.S. retail investors remain optimistic about reaching their investing goals even as student loan payments resume and the threat of a recession looms, according to data from the latest Retail Investor Beat from trading and investment network eToro.
In the short term, investors are still closely eyeing the impacts of inflation with 26% of retail investors saying inflation poses the biggest external risk to their investments over the next three months. However, investors are playing it smart and showing a level of sophistication during this time with three in four (75%) currently invested in cash assets. Nearly one quarter (24%) of retail investors cited a U.S. recession as the biggest risk to their investments over the next 12 months.
Commenting on the data, eToro US Investment Analyst Callie Cox, said: “Investors felt the lift from markets this summer, yet they seem to be preparing for a recession on the horizon and they’re skeptical that this rally could last. While the economy’s resilience has been encouraging, average investors are proceeding with caution because they’re aware of the risks plaguing US markets.”
Retail investors are continuing to think long term when it comes to their overall investing goals: the primary goal for more than half (55%) of Americans is to provide long-term security, closely followed by achieving financial independence (40%) and funding retirement alongside a pension (38%).
Despite a confluence of external factors, U.S retail investors remain optimistic about these investing goals, especially younger Americans. 61% of investors say they’re on track to achieve or are already achieving their primary investing goals, up from 55% who said the same in Q2 of this year.
Notably, younger Americans are exhibiting a higher level of optimism than their parents – 78% of those between the ages of 18-34 say they’re on track to achieve their investing goals, while just 56% of those over the age of 55 said the same.
Amid this confidence, nearly nine out of 10 investors (88%) acknowledged that emotions or personal experiences influenced their investment decisions over the past three months. Despite men reporting higher confidence in their investments, the data found that women are actually less likely than men to let their experiences or emotions impact investment decisions, challenging an assumption often made by modern culture and society.
Cox adds: “It’s no surprise that many investors admit to making emotional decisions in their portfolios. We tend to think of finance as a set of spreadsheets, but that ignores the reality that financial decisions come from human beings. Emotions aren’t bad – they set our human brains apart – but you have to keep your emotions in check. Your brain often works against you when sensing risk and opportunity.”
The industries that investors are turning to amidst higher levels of optimism are financial services and technology. Despite regional banking turbulence earlier this year, American investors continue to remain confident in the future of banks. More than half (54%) say they hold investments in the financial services sector while 47% say they hold investments in technology. Confidence in the financial services sector – often considered the lifeline of the U.S. economy – lines up with Americans’ growing confidence in the current state of the U.S. economy itself. Almost half (41%) of U.S. investors indicated that they are confident in the U.S. economy, up from 34% in Q2. While this may seem like a contradiction to 24% of respondents who believe the largest external risk to their portfolio is a recession, it indicates that retail investors feel more confident about the current economy. Yet they’re still fearful of a potential recession in the near future.
Looking to the future, investors are playing it smart, holding onto their investments and not making drastic changes. 58% have left their portfolios unchanged, while 33% say they’ve increased the amount they contributed to their portfolios.
ENDS
Notes to editors
About this report
The Q3 2023 Retail Investor Beat was based on a survey of 10,000 retail investors across 13 countries and 3 continents. The following countries had 1,000 respondents: UK, US, Germany, France, Australia, Italy and Spain. The following countries had 500 respondents: Netherlands, Denmark, Norway, Poland, Romania, and the Czech Republic.
The survey was conducted from 18th August – 29th August 2023 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
finnetoro@finnpartners.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 32 million registered users from more than 100 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 center here for our latest news.
US 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