Two out of three investors cite inflation as biggest risk to investments
- 65% of American investors held their investments in response to recent stock market selloffs
- 66% of survey respondents say the biggest external risk to investments over the next three months is inflation
- More than half (52%) of investors note their primary goal of investing is to provide long-term security
HOBOKEN, N.J., July 6, 2022 – US retail investors remain resilient despite stock market selloffs and looming recession fears, new data from eToro finds. The social investing network’s latest Retail Investor Beat reveals that two-thirds of American investors (65%) held their investments steady during the recent stock market selloff.
Despite rising concern over inflation, investors are holding steady
Inflation is touching almost all aspects of everyday life and is top of mind for American investors. When asked what poses the biggest external risk to investments in the next three months, 66% of respondents noted rising inflation followed by the state of the global economy (39%) and international conflict (34%). Despite these concerns, however, American investors remain optimistic; more than two out of three investors (69%) are confident in their current investments.
In light of recent market volatility, the survey data also found a shift in focus to clean technology as a long term investing strategy. When asked about the sectors that present the best investment buying opportunity in the next three months, 40% of respondents said technology (electronics manufacturers, software developers, and IT firms) and 38% said energy (oil and gas exploration and production companies).
eToro US Investment Analyst, Callie Cox, comments, “Today’s investors are facing a perfect storm of setbacks including ongoing market uncertainty, skyrocketing inflation, and an overall increase in cost of living and housing costs. Despite these factors, investors across generations are demonstrating a level of maturity and understanding and are not letting emotions dictate important money decisions.”
Younger investors have their eyes on financial independence
US investors are thinking long term when it comes to financial planning. More than half (52%) of investors say their primary goal for investing money is providing long-term security followed by helping fund retirement alongside a pension (38%) and achieving financial independence (37%). For younger generations, financial independence is paramount. Forty-three percent of respondents aged 18-34 are investing to achieve financial independence followed closely by providing long-term security (42%).
eToro US Investment Analyst, Callie Cox, comments, “For many younger investors, this is the first time they are navigating a bear market. Managing risk for the first time, focusing on long term goals, and seeing the big picture is difficult for even the most seasoned investor. The data shows that young investors are making smart, informed decisions. The best path forward is to be patient; history shows that investment portfolios can make it out of the bear market on stronger footing.”
Despite “Crypto Winter,” investors still demonstrate interest in digital currencies Investors are still confident in the future of crypto. When it comes to investment choices, currently, one in three (33%) American investors are invested in crypto assets, compared to 54% in cash, 54% in domestic equities, and 38% in domestic bonds / fixed income. 40% of investors believe Bitcoin presents the best investment opportunity over the next three months. Crypto investors are also demonstrating that they’re thinking long term. More than half (55%) of crypto investors held their investments in response to the recent crypto asset market selloff, with just 8% selling their investments.
Notes to editors
Survey research conducted by Appinio from June 7 to 17, 2022. Previous waves were conducted quarterly in conjunction with Opinium. In total, 10,000 retail investors sampled across 14 countries, 1,000 in each: UK, US, Germany, France, Australia and Spain. 500 in the following: Italy, Netherlands, Denmark, Norway, Sweden, Poland, Romania, and the Czech Republic. 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.
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