Despite the resumption of student loan payments and the looming threat of a recession, retail investors in the US remain optimistic about reaching their investing goals, according to data from eToro’s latest Retail Investor Beat report. The report reveals that investors are closely monitoring the impacts of inflation, with 26% of retail investors identifying it as the biggest external risk to their investments in the next three months. However, these investors are also acting prudently, with 75% currently invested in cash assets.
The report also highlights that nearly a quarter of retail investors (24%) view a US recession as the biggest risk to their investments over the next 12 months. Callie Cox, eToro’s US Investment Analyst, notes that investors are preparing for an impending recession and are skeptical about the longevity of the market rally experienced this summer.
Interestingly, despite the uncertainties, retail investors remain focused on their long-term investing goals. The primary goal for over half (55%) of Americans is to provide long-term security, followed closely by achieving financial independence (40%) and funding retirement alongside a pension (38%). The report emphasizes that U.S. retail investors, especially the younger generation, maintain an optimistic outlook on achieving these goals. In fact, 61% of investors believe they are on track to achieve or are already achieving their primary investing goals, compared to 55% in Q2 of this year. Notably, younger Americans (ages 18-34) exhibit higher levels of optimism, with 78% stating that they are on track to achieve their investing goals, compared to 56% of those over 55.
Despite their confidence, the survey reveals that emotions and personal experiences influenced the investment decisions of nearly 90% of investors over the past three months. Interestingly, while men reported higher confidence in their investments, women were found to be less likely to let their experiences or emotions impact their investment decisions, challenging societal assumptions.
According to the report, investors are turning to the financial services and technology industries amid their heightened levels of optimism. Despite previous regional banking turbulence, American investors remain confident in the future of banks.
The Q3 2023 Retail Investor Beat report surveyed 10,000 retail investors across 13 countries and 3 continents. The UK, US, Germany, France, Australia, Italy, and Spain accounted for 1,000 respondents each, while the Netherlands, Denmark, Norway, Poland, Romania, and the Czech Republic had 500 respondents each.
Conducted by research company Opinium, the survey included self-directed or advised retail investors who held at least one investment product, such as shares, bonds, funds, or investment ISAs, and were not necessarily eToro users.
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