Retail investors name inflation as top concern, eToro survey reveals
Online broker eToro has published the key findings of its latest Retail Investor Beat survey.
Retail investors appear resilient despite stock market sell offs and recession fears, with nine in ten (92%) either holding onto investments or buying the dip.
Less than one in ten (8%) sold their investments during the recent stock market sell offs, two thirds (64%) held firm with their positions and another 28% bought the dip.
“Despite a barrage of setbacks across global financial markets, retail investors have found the strength to look past the short term volatility and use these drops in prices to bolster their portfolios for the long term,” comments Ben Laidler, eToro’s Global Market Strategist.
In light of recent market volatility, retail investors have repositioned their portfolios by increasing their exposure to commodities (17%), crypto (16%), domestic equities (16%), cash (15%), foreign equities (13%), alternatives (13%), domestic bonds (12%), foreign bonds ( 9%), and currencies (9%).
Looking at sectors, one in five retail investors (20%) increased their exposure to the energy sector, 19% bought technology, while real estate (16%), materials (15%), healthcare (14%), financial services (14%), staple consumer goods (14%), industrials (14%), utilities (13%), telecommunications (12%) and discretionary consumer goods (11%) followed.
Retail investors’ confidence in their investments has consistently declined over the five quarters since the inception of eToro’s Retail Investor Beat. Confidence has fallen from 83% in Q2 2021, 81% in Q3 2021, 80% in Q4 2021, 73% in Q1 2022 to 72% at the end of June this year.
Rising inflation regained the top spot as the biggest concern over the next three months for retail investors (54%, up from 47% in Q1 2022) followed by international conflict (43%, down from 57% in Q1), the state of the global economy (steady at 37%) and rising interest rates (27%, up from 21% in Q1).
Despite these risks, almost half (48%) of respondents plan to invest the same amount of money over the next three months and 30% expect to invest more. A third (32%) believe energy will still present the best investment buying opportunity over the next three months, followed by technology (31%), real estate (25%), utilities (20%), healthcare (19%), financial services (17%), materials (17%), industrials (15%), staple consumer goods (14%), telecommunications (13%) and discretionary consumer goods (7%).
“While energy and real estate are two of the smallest global sectors, they have historically been good hedges against inflation and remain top of retail investors’ buy and watchlists. Across all levels of experience, retail investors have increased allocations to a series of defensive sectors and seem to have no intention of slowing down,” Ben Laidler concludes.