Two Thirds of Retail Investors Unfazed by Bear Market


May 9, 2023

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2023 is here, and despite all the bearish events, expectations are high. According to eToro's Retail Investor Beat report, most retail investors feel indifferent or directly upbeat about the recession. Is this a sign that the worst is over? Let's see.

In this annual report, eToro seeks to understand where retail investors stand. According to data collected by eToro, two-thirds of respondents are either positive or ambivalent regarding the market's future.

Yet, you have to look beyond the simple number because what lies behind it is even more insightful. The analysis is quite detailed, and we can see the results by age group. The big surprise is that the younger the investor, the more optimistic they are.

Three out of four respondents in the 18-34 age group felt indifferent or optimistic about the recession. The next group, 35 to 44-year-olds, maintained similar results. But the following two age groups, 45-54 and +55, viewed things with less positivity and more indifference.

This reveals some interesting elements about the current state of the retail investor. On the one hand, we can understand that investors are investing with a time horizon of years or even decades in mind.

Investors also increasingly see inflation as less and less of a threat. Currently, 19% of respondents cite inflation as the most significant risk factor, down from 24% at the end of Q3 in 2022.

While the market reacts to news, the sentiment is positive. Will this affect crypto? Indirectly, yes. On the one hand, millennials and zoomers are storming the market. Bitcoin's correlation with traditional markets also remains very high. With this in mind, we expect crypto investors to be optimistic as long as the time horizon is distant.