The high cost of living and fears for the health of the economy are biting the portfolios of retail investors, who in a highly volatile quarter are choosing to reduce invested capital to cope with rising domestic bills. This is the photograph of the third quarter taken by the latest Retail Investor Beat survey promoted by the eToro investment community.
The survey, re-proposed by eToro on a quarterly basis and conducted on 10,000 retail investors in 13 countries and 3 continents, found that, in the last three months, two out of five investors (41%) have reduced the amount of money invested, thanks to the ” increase in the cost of living which was reflected in higher bills (18%) and in the need to increase their savings for any emergencies (16%). The poor performance of the markets also led to rethinking some choices, with 12% of those who reduced their investments being driven by the desire to accumulate liquidity to re-invest at a more favorable time. In a context in which confidence on the health of the global economy is falling more and more, with 70% of the overall sample declaring themselves skeptical about the economic outlook and 22% fearing the effect of a possible recession on their portfolio , therefore, the confidence of retail investors in their investments also decreases.
A year ago, in fact, four out of five investors were convinced of their choices, while in the third quarter of 2022 the figure dropped to 64. The decline for Italy is even more pronounced, with a decline from 80% to 53%. The Italian retail investors who opted for a reduction in exposures in the last quarter were 42%, 56% of whom will continue to disinvest over the next three months. The rise in bills affected 35% of those who reduced the capital in their portfolios (16% of total respondents in Italy), the need to have greater liquid savings 28% (13% of the total) and the choice to accumulate liquidity for better market moments 23% (11% of the total).
Among the youngest, i.e. among investors aged 18 to 40, one of the key reasons for the choice to divest part of their capital is the desire to recalibrate their portfolios on assets perceived as safer (25%), even if they do not go to sacrifice interest in the crypto asset market, which remains an attractive investment option for this champion, despite a somewhat fluctuating performance.
“The democratization of finance is a process that accelerated sharply during the pandemic – commented Emanuela Manor, Regional Manager Italy of eToro -. Many have found themselves in difficulty and there has been an awareness of the importance of better and more active management of their savings. There has been a sharp increase in retail investors, small investors, who have sought an additional source of income and greater security for the future in the world of investments ».