Modern Investor Pulse — Q2/2023

Retail investors take their foot off the gas

March 2023

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Modern Investor Pulse


Retail Investors' Q2 2023 Trends

After a wild 2022, the early months of 2023 saw investor optimism shoot up, thanks to China's reopening and the US economy's unexpected resilience. And retail investors went all in, pouring over $1.5 billion daily into the market throughout February. But recently the temperature’s changed – and both retail and institutional investors are now taking a more cautious approach.
Our Modern Investor Report puts the spotlight on over 1,700 retail investors from our one-million-strong global community – a group of forward-thinking, affluent, young investors who are eager to stay ahead of the financial curve. The report uncovers key retail investor trends: how they’re feeling about markets, how much they’re planning to invest, and what they’re betting on in the coming months.

Here's the preview:


think the global stock market will be stronger in a year's time.


plan to take less risk over the next three months.


plan to invest between $5,000 and $50,000 over the next 12 months.


plan to invest in ETFs in the next six months.

Digging deeper

Investor optimism reached the highest levels we’ve seen since the survey began in 2021, with 68% of respondents betting the stock market will be higher a year from now. But that bullish sentiment hasn't clouded their judgment, and retail investors are treading carefully this quarter – turning to less risky, short-term products until the current uncertainty blows over.
In fact, more than half (58%) of investors plan to take less risk over the next three months, and 64% of them say they’re going to invest between $5,000 and $50,000 of their current cash over the next year. Of those, 84% plan to invest in stocks, up from 73% in the previous quarter, while 58% say they’re going to invest in ETFs – broadly in line with the previous quarter's 61%.

Are you planning to take more or less risk with your investments over the next three months?



Meme stocks are out – ethical investing is in

Meme stocks are so last year, with only 5% of investors having dabbled in them over the past three months. Their sights are set on Big Tech instead: our community seems to be betting that AI will drive tech titans’ ability to innovate rather than exposing them to disruption from upstarts.
Socially conscious investing isn't going anywhere either, with 60% of respondents saying ethical and sustainable considerations are important to them. And despite skepticism surrounding the term “ESG” due to greenwashing, investors do still care: 52% actively research a company's values when making investment decisions – and company culture (43%), environmental impact (39%), and human rights violations (32%) aren't far behind.

Did you invest in meme stocks in the last three months?



Apple heats up as Tesla cools

Tesla stock has been incredibly popular among the retail community in the last few months, but Apple pipped it to the post this time around: more than a third (37%) of investors plan to invest in the stock in the next 12 months, followed closely by Microsoft (33%), Nvidia (28%) and Amazon (27%). For poor spurned Tesla, the figure’s only 24%.

What stocks are you planning to invest in over the next 12 months?






AI investment tools: proceeding with caution

Only 36% of investors said they’d use AI tools to make investment decisions over the next six months. On that point, Carl Hazeley commented, “As helpful as investors think ChatGPT is, it’s still in its infancy and unable to tell you whether you should buy or not – and that means they’re cautious about using it to make decisions.”

In the next three to six months, do you plan to use AI when making investment decisions?



The rise of ETFs

71% of respondents plan to invest in exchange-traded funds (ETFs) in the next six months. And that's no wonder: the world of asset management is exploding with ETFs and funds designed for retail investors – and with nearly half of all funds and ETFs launching in the past decade, the total number available has hit 10,000.
Broad market trackers are the top ETF picks: 57% of ETF investors are currently putting their money into these popular trackers, compared to sector-focused ETFs (28%) and thematic ETFs (24%). And according to our community, Vanguard reigns supreme as the platform of choice, with 60% of retail investors saying they’d happily invest their cash with them. iShares comes in a strong second place at 44%, and Fidelity takes third place at 29%.
And it seems the rising popularity of ETFs is capturing the attention of a younger generation of investors: 70% of those aged 25-34 and 61% of those aged 35-44 are planning to invest in ETFs this year, compared to only 39% of those aged 60-69 and 48% of those aged 50-59.

Do you plan to invest in ETFs in the next six months?



The evolution of the female investor

Confidence can be a barrier for some women who haven't begun their investing journeys, but the attitudes and behaviors of those who do invest are pretty similar to their male counterparts: women are just as optimistic about the economy, for example, and are equally inclined to invest in both stocks and ETFs.
And our experience suggests women seek more information before diving into investment decisions, displaying rational, calculated approaches – while some men might fancy themselves experts in emerging technology after skimming a few tweets.
That might be why women seem less interested in hyped-up opportunities: they're 6% less likely to predict a bitcoin surge in the next year, 4% less prone to invest in AI, and 9% less likely to bet on Tesla. Sustainability is also a priority for women, who are 15% more likely to factor it into their investments.
Interestingly, younger women seem more inclined to invest than their older counterparts. The reason for that needs further investigation: it could suggest that younger women benefit from better access to technology, information, and workforce representation. Alternatively, it might reflect the downside of starting families and the impact on women's career trajectories. Either way, there’s a lot to unpack here in the future, so watch this space.

Wrapping up: sophisticated retail investors are the new normal

Retail investors are evolving, becoming more sophisticated and self-directed. The pandemic saw them actively handpick stocks for their portfolios, and now they're embracing ETFs to diversify and stabilize their investments. This new normal sees retail investors turning to broad market tracker funds for safety, rather than giving in to market pressures.
As interest rates rise, less risky options like savings rates and money market funds are gaining traction among individual investors, expanding their self-managed financial toolkit.
Max Rofagha – CEO & Founder, Finimize
Retail investors are taking their foot off the gas right now. The combination of instability in the financial markets and uncertainty around interest rates is forcing the retail investor to be cautious in the short-term. The confidence they have in the stock market over the long-term is a positive, though — retail investors clearly understand that a long time horizon can help weather short term turbulence, as long as they‘re well diversified.

About the survey

The Finimize Modern Retail Investors survey is run every quarter. You can access the previous survey here.
Data for Q2/2023 collected in March, 2023
Number of respondents: 1,700+

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