Retail Investors Wait for Better Economy Before Adding More Stocks | LeapRate

American retail investors are staying invested but want to see real improvement in the economy before they put more money into the market, according to new research from trading platform eToro.

The company’s latest Retail Investor Beat survey asked 1,000 U.S. retail investors what would push them to increase their investments. The top answer, chosen by 40% of people, was stronger economic growth paired with lower inflation. Lower interest rates came next at 29%, followed by less political and global uncertainty at 27%, and better stock prices after a market drop at 26%. Only 8% of investors said they feel fully confident putting money into stocks right now.

Bret Kenwell, eToro’s US Investment Analyst, said investors are not panicking, but they are being more careful about where they put their cash. He said people are looking for a mix of good economic signs and less uncertainty before adding more money to the market.

Inflation is still the top worry for investors, with 26% naming it as the biggest threat to their portfolios, up from 22% last quarter. Fear of a recession followed closely behind at 22%, while concerns about the broader global economy came in at 12%.

Even so, most investors, 68%, believe they are still on track to meet their financial goals, and many plan to keep investing steadily rather than trying to guess market highs and lows. About 29% said they invest automatically on a regular schedule.

Looking ahead, investors said they want to increase their holdings in cash, growth stocks, high-yield bonds, and commodities over the next year.

Meanwhile, the broker said that among UK investors, 81% of UK retail investors are confident in their investments, while just 35% feel confident about the UK economy. Furthermore, millennials are said to be entering the market after smaller falls, with 32% prepared to buy after a 5-10% decline, up from 26% a year ago.