A recent survey conducted by Betterment, the largest independent digital financial advisor in the US, reveals that retail investors are optimistic about their financial futures despite market instability. The survey collected data from 1,200 retail investors across four generations, including Gen Z, Millennials, Gen X, and Boomers, to understand their current mindset, investing behaviors, and expectations for the future.
The results of the survey show that more than half of the respondents (59%) expressed a positive or very positive personal financial outlook for 2023. This optimism has increased in the last six months. Interestingly, the study also found that financial advisors play a significant role in shaping this optimism, as 72% of those with advisors expressed positivity for the coming year compared to only 42% of those without advisors.
While economic uncertainty persists, investors are shifting their priorities back to longer-term planning. Saving for retirement was noted as the top goal by 43% of respondents, while 41% indicated that increasing their long-term savings is a priority. Another positive finding is that the majority of investors (78%) now have an emergency fund, indicating a higher level of preparedness in case of unexpected financial challenges.
One of the key trends identified in the survey is the increasing focus on cash holdings. 75% of investors reported steady or increased cash allocations, with millennials leading this trend. More than 80% of millennials are either increasing or maintaining their cash holdings. This suggests that investors are seeking stability in their portfolios, aiming to preserve capital and achieve reasonable returns.
In terms of investment vehicles, the survey found that investors are playing it safe, with only 13% of respondents prioritizing investing in new options. However, despite the volatility in the crypto market, the majority of respondents remain invested in cryptocurrencies as long-term investments rather than short-term profit opportunities.
Overall, the survey highlights the optimism among retail investors and their focus on long-term planning and stability in their investment portfolios.