- 73% of retail investors maintain existing investments or purchase more during market volatility
- Majority (56%) admit personal experiences and emotions influence their investing decisions
- Portfolio diversification expands with growth among all sector allocations
- Confidence in AI stocks & the Magnificent 7 remains high despite recent market sell off
Wednesday April 2, 2025 – Retail investors commit to long-term strategies when confronted with market volatility according to the latest quarterly Retail Investor Beat from trading and investing platform eToro. The study, which surveyed 1,000 retail investors across the U.S., revealed that during times of market volatility 73% of investors maintain their existing investment strategy or use it as an opportunity to buy more investments. Only a small fraction (8%) react by selling off their investments. Retail investors’ confidence hasn’t wavered. A majority (66%) believe they are on track to achieve their investment goals, an increase from the previous quarter and marking the highest percentage since Q2 2023.
Commenting on the data, eToro US Investment Analyst, Bret Kenwell, said: “There have been some tough investing environments over the last few years, something that has built resilience among retail investors. This fortitude is on full display amid the current market correction, with confidence among retail investors remaining high. They are committed to their investment goals and long-term plans with a level of discipline that flies in the face of referring to these investors as ‘dumb money’.”
Emotions influencing investment decisions
While confidence in their investment strategies remains high, most investors (56%) acknowledge that their emotions and personal experiences impact their investment decisions. When asked about their reactions to previously losing money or witnessing the value of their investments decline, investors were most likely to report becoming more cautious (49%) and more resilient as an investor (25%). Notably, the top three emotional drivers that most significantly impacted their investments were fear of loss (43%), optimism (35%), and excitement (22%).
Bret Kenwell adds: “Retail investors aren’t immune to volatility and neither are their portfolios. Fortunately, retail investors seem to be in tune with the emotional tolls that come with periods of heightened volatility — something they have had to endure in order to benefit during more prosperous times. Retail investors appear undeterred in their quest toward building wealth as they maintain their approach to markets in the face of increasing uncertainty.”
Diversification expands across sectors, sustained belief in AI & Magnificent 7
Retail investors increased their investments across all sectors this quarter. The most held sectors remained financial services, technology and energy, holdings in materials (+39%), consumer staples (+29%), and communications (+18%) increased the most significantly. After previously favoring cash and bonds, Gen Z rotated back into risk-on assets, showing the largest increases in stocks (+38%) and cryptocurrency (+29%) holdings versus all other generations. Gen Z appears to have pulled their cash holdings from the sidelines to take advantage of opportunities, as allocations in cash assets fell from 75% to 60%.
In light of recent tech selloffs, 64% of investors expect AI stock prices to increase in 2025, up from 59% in the prior quarter. About half of investors (48%) believe the Magnificent 7 will outperform the broader market in 2025, which was unchanged since the previous quarter. While overall confidence in the group remained stable across all other generations, Gen Z investors’ sentiment dropped by 11% this quarter.
Overall, when asked which Magnificent 7 stocks investors are most likely to increase their investment in, Amazon (14%) and Apple (14%) were the most popular. While Boomers and Silent Generation investors were mostly consistent quarter over quarter, their younger counterparts are making moves. Gen Z remains confident in Apple (27%) and Tesla (13%) while backing off Nvidia (4%), which fell to their least likely of future Magnificent 7 investments. Meanwhile, Millennials had the largest positive change for Alphabet at 14% (up from 9%), while Gen X favored Apple at 16% (up from 10%). Both generations cooled on Tesla, which saw the largest negative change from the prior survey. The Silent Generation sees opportunity in Apple at 17% in 2025, (up from 4%).
Kenwell adds: “It’s been a tough first quarter for many investors’ favorite stocks — including tech and consumer discretionary holdings. Despite this, investors are staying resilient, not just in the names they know and love, but by branching out and embracing further diversification at a time where multiple asset classes and various sectors are outperforming the S&P 500. Rather than running from current volatility, investors are embracing it — and at least for now — they’re opportunistically buying the dip.”
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 February 18 – March 4 2025 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
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 40 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