The world “unofficially” entered a recession in 2022 as the central banks tackled raging inflation with interest rate hikes. The inflation may have fallen a little bit, but it still remains high, with key rates at dangerous levels.
S&P 500 is down 17.6%, Nasdaq declined 30%, and DAX “only” 12%, despite the world being in one of the worst economic situations in decades. Investors think the Fed’s hiking cycle is over, with many celebrating and thinking the worst is behind us. But is it?
Retail investors are not afraid
The drop in stock prices this year hasn’t scared away small investors. A new survey from London-based investing insights company Finimize shows that most investors plan to invest the same amount or more in 2023, even though the cost of living is dramatically rising.
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Reportedly, only a tiny amount of retail market participants plan to sell their investments in 2023. Instead, 65% plan to keep investing and 29% have plans on adding more to their portfolios. The survey of more than 2,000 retail investors from all around the world revealed over 80% of them believe the worst of the stock market downturn will be behind us in six months.
“This data is proof that even in the current market environment, the majority are seeing volatility simply as part of the economic cycle thanks to access to information and growing experience with investing.”
Max Rofagha, Finimize’s CEO
One of the most interesting facts to see is that 72% of investors plan to invest in stocks in 2023. However, 64% of retail investors want to invest in Big Tech companies like Apple, Google, Microsoft, or even Meta, despite being the worst-performing stock in the S&P 500 index.
The most fascinating data is the fact that 38% of surveyed investors have plans to invest in crypto, while this year has been one of the worst in history. Terra Luna collapsed and wiped out almost $50 billion from the market valuations. FTX crash caused a massive aversion toward crypto by many. There has been just too much happening, but investors are still keen on buying crypto.
— Investro.com (@investrocom) December 8, 2022
Approximately 56% of traders think Bitcoin will rise in the near future, creating a neutral sentiment. While investors are open to investing in 2023, most of them are worried about the higher cost of living, which is one of the biggest motivations behind putting their finances into markets.
Read more: Do you believe Bitcoin is dead? Think twice!
The rise of the internet and Web3 is definitely helping to get more retail investors into markets, who account for 52% according to the wealth management company Indefi. This trend is expected to grow in the upcoming years, potentially bringing more power into the hands of retail.