• New data from eToro shows 7% of Aussie retail investors sold out during market falls. One in four bought the dip.
  • 75% Aussie’s say they’re “quite confident” or “very confident” in their investments.
  • Almost half of all global investors plan to invest just as much cashola over the next three months (30% expect to invest more).

Global retail investors are feeling pretty resilient despite standing about and watching inflation go nuts, stock markets crash and fears of a US, Australian and probably global recession creeping ever higher.

That’s the word from Ben Laidler, who’s on eToro’s global market strategy desk.

Laidler says the social investment network’s latest quarterly survey of some 10k retail investors from 14 countries, (including 1,000 in Australia) has found the vast majority are either old hands at this game or just naturally endowed with various appendages made of brass.

eToro found nine in 10 investors (more actually, some 92%) are either holding onto their investments or buying the dip (BTD), during these intensely dip flavoured days.

Less than one in 10 (8%) of global investors sold their investments during the recent stock market sell-offs, Laidler says, while a little under two-thirds (64%) held firm to their positions.

Here, we say well done. There’s a stack of data out there which confirms that the ship usually rights itself after a stretch of stormy weather.

What else? eToro has found more than a quarter of all investors surveyed (some 28%) bit the bullet and bought the dip.

Aussie investors show some steely resolve

Here in Australia, investor sentiment was apparently cut from the same loin cloth:

  • 7% of Australian retail investors opted to sell
  • 68% held their investments
  • 25% bought more (BTD) while prices were down

 

“Despite a barrage of setbacks across global financial markets, retail investors in Australia and around the globe 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. With bull markets ultimately built on the shoulders of bear markets and near four times the length and magnitude, staying the course and repositioning their portfolios should serve these investors well,”  Laidler says.

 

In light of recent market volatility, global retail investors have repositioned their portfolios increasing their exposure to commodities (17%), crypto (16%), domestic equities (16%, cash (15%).

Australian retail investors preferred to reposition their portfolios in favour of cash (20%), followed by domestic equities (17%), commodities (16%), crypto (14%).

Looking at sectors, Australian retail investors increased their allocations to the following sectors in light of recent market volatility: energy (17%), technology (17%), utilities (15%), real estate (15%), healthcare (15%), and financial services (14%).

Get confident again, stupid

Laidler says global retail investors’ confidence in their investments has just kept falling over the last five quarters – pretty much since the inception of eToro’s Retail Investor Beat. Is there a connection? I say probably.

Confidence has fallen from a robust 83% in Q2 2021 to a decent 72% at the end of June this year.

For Aussie retail investors, confidence remains when considering their investments with more than half (58%) saying they are “quite confident” and nearly one in five (17%) stating to be “very confident”. Sounds like they’re the Stockhead readers, right there.

 

Inflation biggest concerns, investors are hedging

Inflation regained the top spot as the biggest concern over the next three months for global retail investors (54%, up from 47% in Q1 2022) followed by international conflict (43%, down from 57% in Q1).

Mirroring this, Australian investors’ biggest concerns were rising inflation (52%), state of the global economy (43%), international conflict (42%), and rising interest rates (38%).

Despite these risks, almost half (48%) of global respondents plan to invest the same amount of money over the next three months and 30% expect to invest more.

eToro Australian market analyst and legend, Josh Gilbert told Stockhead something along the lines of (and I’m admittedly paraphrasing here): “Christian, listen to me – the reality is investment strategies depend a heap on an investor’s risk profile and timeline.”

“Most retail investors are Millennials and Gen Z that have a much longer time horizon. Therefore, they are generally happier to buy these assets at the current discounts with the view of holding for many years until markets eventually recover.”

I said in a funny voice: “Excellent insight Josh, thanks.” (Add wink emoji here, but too old to know how).

(`･ω･´)

Then: “Oh. Some of us older retail investors are also happy to hang on in, by the way – but only out of experience, wisdom and the gentle sense of moderation which comes with being old and a little more worthless in the eyes of a society which has been taught to ignore us.”

But ah, casual data-driven ageism – that’s entirely cool with me.*

Top choice of sectors for Aussie investors – according to eToro:

  1. Technology – 29%
  2. Energy – 27%
  3. Real Estate – 24%
  4. Materials – 23%

“Commodities have historically demonstrated a low correlation to many other asset classes, making energy and materials attractive sectors for portfolio diversification,” Josh said, a little more warily.** “Locally, the materials sector has a significant weighting on our local market, making it an investment that Australian investors are likely to be very familiar with.”

A little detail on the survey which is good to know:

  • Research done from 7 to 17 June 2022.
  • 10,000 retail investors sampled across 14 countries
  • 1,000 in each: UK, US, Germany, France, Australia and Spain
  • 500 in 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.

*ED: I’m not old. Ageism doesn’t apply to this comment. I’m just a very difficult person to work with.

**ED: Josh could not be more wary. He is naturally, quite anxious. Some would even say fastidious. 

 

 

The end.