9 out of 10 retail investors plan on investing more or the same amount over the next 3 months
- 42% of 18-34 year old investors and 50% of 35-44 year old investors think a bull market has started or will start by the end of the year
- Investors remain concerned about inflation, with 26% considering inflation the top risk to their portfolio over the next 3 months
- Retail investors plan to prioritize investing in tech and the financial services sectors for remainder of 2023, with real estate least appealing sector
Wednesday June 28 – U.S. investors are adjusting asset allocations as the market rallies but largely sticking to their long-term plans, according to data from the latest Retail Investor Beat from trading and investment platform eToro. The findings indicate that while confidence in both the US and global economies is down from Q1, investors are largely staying the course.
Despite a dip in confidence, the majority of U.S. retail investors are still backing the markets, with only 9% saying they plan on scaling back investments in the next 3 months. Over half (63%) plan on leaving contributions unchanged, and the remaining 28% of investors plan to increase their contributions in the upcoming quarter. Retail investors are understanding the need for a long-term mindset when investing their money, as they’ve been in this position before. More than half of respondents (55%) say they invest to provide long-term security. Other top reasons for investing include to help fund retirement alongside a pension (40%), to achieve financial independence (39%) and to supplement income (37%).
Commenting on the data, eToro US Investment Analyst Callie Cox, said: “Individual investors have been holding on for a while, but they’re increasingly believing this market rally is for real. Analysts now think S&P 500 earnings could start increasing on a quarterly basis — a trend that’s marked the end of bears in the past. Hiring and employment have stayed consistently strong, too. Of course, better isn’t the same as good, and there are still signs of growth slowing.”
As they adjust or add to their portfolio allocations, American investors are most likely to lean into tech, with 23% of respondents saying they plan on increasing their investments in the sector, followed by financial services (12%). They are moving away from real estate and consumer discretionary stocks, with 15% and 14% planning on decreasing investments in those sectors by the remainder of the year, respectively. Older investors are leading this pull-away from real estate and consumer discretionary stocks.
Many on Wall Street have labeled the current market rally a bull market, but the label is more of a psychological shift than a concrete title. The shift is evident in U.S. investors, especially in younger generations, with 42% of 18-34 year old investors and 50% of 35-44 year old investors thinking a bull market has started or will start by the end of the year. As for outlook, just 15% of investors are expecting yearly returns to be flat or in the red – a strong majority are feeling confident in their expected returns.
When asked about the biggest perceived external threats to their portfolios over the next 12 months, Americans agree that inflation tops the charts (26%), followed by the state of the U.S. economy (21%) and the state of the global economy (13%). This marks a shift from last quarter, where fears of a potential U.S. recession were most top of mind for respondents.
Cox adds: “Your portfolio decisions should depend on how long you’re investing and how much you can stomach the ups and downs, not where you think prices are heading next. Investors should be evaluating: why are you investing, and when do you need your money?”
ENDS
Notes to editors
About this report
The latest 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 2nd June – 14th June 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.