Retail Confidence Rebounds After Two Quarters; US Exposure Hits Record 43%, eToro Finds

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Retail investors are regaining confidence in the US market
after two quarters of decline, according to the latest quarterly Retail
Investor Beat survey from trading platform eToro.

The survey, which covered 10,000 retail investors across 12
countries, found that 38 percent now view the US as the region with the
strongest long-term return potential. This marks a 12 percent increase from the
previous quarter, reversing consecutive declines of 9 percent in the first
quarter and 17 percent in the second.

Portfolio allocations reflect the same trend, with 43
percent of investors now holding exposure to the US market, an 8 percent rise
from the prior quarter and the highest level since the survey began in early
2023.

Lale Akoner, eToro’s Global Market Strategist, Source: LinkedIn

“Now, as confidence in the resilience of the US economy
improves, we’re seeing a reversal of that trend,” eToro’s Global Market Strategist Lale Akoner, commented.

“Portfolios are once again
tilting back toward the US, reflecting recognition that, despite global
diversification, the American market remains the cornerstone of global
investing,” Akoner, added.

At the same time, retail investors are showing more caution
toward the so-called Magnificent 7 technology stocks, which include Amazon,
Apple, Microsoft, Meta, Tesla, Nvidia, and Alphabet.

Thirteen percent expect
these stocks to significantly outperform the market in 2025, while 33 percent
expect slight outperformance.

You may find it interesting at FinanceMagnates.com: 27%
of Retail Investors Shift Away from Big Tech Giants: eToro Survey.

The number of investors planning to reduce exposure has
grown modestly across all seven companies compared with a year earlier. Tesla
saw the largest change, with a 6 percentage point increase in the share of
investors not invested or not planning to invest.

Table of Contents

US Dollar Holds Reserve Currency Status

Retail investors also remain attentive to the outlook for
the US dollar. Half of respondents reported they had adjusted or were planning
to adjust their portfolios for possible long-term weakness.

However, 83 percent believe the dollar will retain its
position as the global reserve currency over the next 10 years. Only 7 percent
expect it to lose that status, with bitcoin , the Chinese yuan, the euro, gold,
and central bank digital currencies cited as possible alternatives.

Read More: Retail
Investors Confident about Portfolio despite 2022 Bear Market
.

“Retail investors are effectively balancing diversification
with a clear acknowledgment that long-term growth opportunities are still
heavily anchored in the US,” Akoner, noted.

Recession Fears Ease, Domestic Risks Rise

The survey further indicated easing fears of a global
recession. Twenty-three percent listed the global economy as the top risk to
their portfolios, down from 26 percent in the previous quarter.

Inflation remained the second most cited concern at 19
percent. Meanwhile, the share of investors viewing their domestic economy as
the biggest threat rose to 14 percent from 11 percent, with US investors
showing the highest level of concern at 28 percent.

Retail investors are regaining confidence in the US market
after two quarters of decline, according to the latest quarterly Retail
Investor Beat survey from trading platform eToro.

The survey, which covered 10,000 retail investors across 12
countries, found that 38 percent now view the US as the region with the
strongest long-term return potential. This marks a 12 percent increase from the
previous quarter, reversing consecutive declines of 9 percent in the first
quarter and 17 percent in the second.

Portfolio allocations reflect the same trend, with 43
percent of investors now holding exposure to the US market, an 8 percent rise
from the prior quarter and the highest level since the survey began in early
2023.

Lale Akoner, eToro’s Global Market Strategist, Source: LinkedIn

“Now, as confidence in the resilience of the US economy
improves, we’re seeing a reversal of that trend,” eToro’s Global Market Strategist Lale Akoner, commented.

“Portfolios are once again
tilting back toward the US, reflecting recognition that, despite global
diversification, the American market remains the cornerstone of global
investing,” Akoner, added.

At the same time, retail investors are showing more caution
toward the so-called Magnificent 7 technology stocks, which include Amazon,
Apple, Microsoft, Meta, Tesla, Nvidia, and Alphabet.

Thirteen percent expect
these stocks to significantly outperform the market in 2025, while 33 percent
expect slight outperformance.

You may find it interesting at FinanceMagnates.com: 27%
of Retail Investors Shift Away from Big Tech Giants: eToro Survey.

The number of investors planning to reduce exposure has
grown modestly across all seven companies compared with a year earlier. Tesla
saw the largest change, with a 6 percentage point increase in the share of
investors not invested or not planning to invest.

US Dollar Holds Reserve Currency Status

Retail investors also remain attentive to the outlook for
the US dollar. Half of respondents reported they had adjusted or were planning
to adjust their portfolios for possible long-term weakness.

However, 83 percent believe the dollar will retain its
position as the global reserve currency over the next 10 years. Only 7 percent
expect it to lose that status, with bitcoin , the Chinese yuan, the euro, gold,
and central bank digital currencies cited as possible alternatives.

Read More: Retail
Investors Confident about Portfolio despite 2022 Bear Market
.

“Retail investors are effectively balancing diversification
with a clear acknowledgment that long-term growth opportunities are still
heavily anchored in the US,” Akoner, noted.

Recession Fears Ease, Domestic Risks Rise

The survey further indicated easing fears of a global
recession. Twenty-three percent listed the global economy as the top risk to
their portfolios, down from 26 percent in the previous quarter.

Inflation remained the second most cited concern at 19
percent. Meanwhile, the share of investors viewing their domestic economy as
the biggest threat rose to 14 percent from 11 percent, with US investors
showing the highest level of concern at 28 percent.

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