about 2 months ago • 3 mins
84% of retail investors are planning to invest as much or more than last quarter.
67% believe global stock markets will be higher in 12 months.
62% plan to invest in stocks, 46% in exchange-traded funds, and 36% in cash products.
49% have between $5,000 and $100,000 to invest in the next 12 months.
84% of retail investors are planning to invest as much or more than last quarter.
67% believe global stock markets will be higher in 12 months.
62% plan to invest in stocks, 46% in exchange-traded funds, and 36% in cash products.
49% have between $5,000 and $100,000 to invest in the next 12 months.
A few weeks ago – just as the dark comedy “Dumb Money” was hitting theaters – we did our regular check-in with over 4,000 of you savvy investing types to find out how you’re feeling about markets and what your portfolio plans are now, for our latest Modern Investor Pulse. Here’s what you told us…
The Finimize Index tracks retail investor sentiment across our global community every quarter. In this quarter, 67% of respondents said they expect global stock markets to be higher a year from now – that’s slightly less compared to last quarter and broadly in line with the S&P 500’s direction.
Almost 60% of respondents are planning to maintain the same level of risk with their investments over the next three months, while 16% plan to take on more risk.
At the same time, over half (52%) of respondents said they plan to keep steady with their investing plans, putting the same amount into markets as they have been. About a third (32%) plan to invest more, and only 12% plan to reduce the amount they invest over the next three months.
A substantial 42% of modern investor survey respondents said they’re holding onto between $5,000 and $100,000 that they plan to invest in the next 12 months. A further 6% plan to invest over $100,000 – and there’s little variation across age groups spanning from 25 to 65. Encouragingly, younger investors showed they’re more affluent than they’re typically given credit for: 79% of 25- to 34-year-olds, for instance, have more than $1,000 in cash that they plan to invest over the next year.
And, sure, there’s been a dropoff in the amount of cash retail investors have ready to put into markets, but in all likelihood, that’s because they’ve been doing exactly what they said they’d be doing: investing. In the second quarter, around 30% of respondents had between $10,000 and $50,000 that they planned to invest. A quarter later, that figure had fallen to 22%, and it currently sits at just 18%.
Female investors, who’ve been historically overlooked, are set to hold the majority of household wealth within two years and already have significant sums to invest. Our data, based on over 1,000 female respondents, shows that women are confident and optimistic – and actively taking advantage of market opportunities. And what’s more, over 40% of women also feel that the investment gap is closing.
Retail investors are still keen on stocks. That’s probably no surprise given the wave of excitement around AI this year and the buoyant US stock market that’s come partially as a result, with AI-related tech companies like Nvidia driving some impressive gains. Indeed, 62% of Modern Investor Pulse respondents said they’re looking to allocate money toward stocks.
Exchange-traded funds were the second-most-popular choice among modern retail investors, with 46% planning to put cash into ETFs. Next up were cash products, with 36% of respondents eyeing those up, more than double the 17% who were doing so last quarter. But that stands to reason: higher interest rates on offer to savers make cash products more attractive than they’ve been in a generation.
In the height of the GameStop short-squeeze trading frenzy that eventually drew Hollywood’s attention, commentators speculated that retail investors’ fascination and trading activity would fade away as soon as markets became more challenging. Yet as each quarter passes, those pundits are proved more comprehensively wrong: retail investors are building wealth – and they’re in it for the long haul. They’re increasingly savvy and diversified, and they now account for a bigger proportion of US stock market volumes than they did before the pandemic and the “dumb money” squeeze.
“Our community has again shown that individual investing wasn't just a pandemic pastime: retail investment inflows remain high and with no indication of cooling off. While concerns over a potential recession, ever-increasing inflation, and the ongoing cost of living crisis remain, we’re seeing a slight disconnect in retail investor behavior as they remain undeterred and optimistic. It’s clear they’re committed to their long-term strategies despite economic uncertainty, with the majority planning to continue to invest the same or more for the year ahead. It also makes sense that they’re adding to their savings given the rates on offer.”
– Max Rofagha, CEO and founder, Finimize
For more detail and analysis, check out the full report.
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Learn MoreDisclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
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