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.”
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.”
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.”
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.”
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.”
