Retail Investors Regain Confidence in the US Market, eToro

Retail Investors Regain Confidence, eToro reports, as they show renewed trust in the long-term potential of the US market after two consecutive quarters of decline, according to the latest quarterly Retail Investor Beat from the online broker. The survey, which gathered responses from 10,000 retail investors across 12 countries, indicates that 38% now view the US as the most promising region for long-term returns, marking a notable rise from the previous quarter and reversing earlier declines of 9% in Q1 and 17% in Q2. 

This shift in sentiment is further evident in investors’ portfolios, with 43% now holding exposure to the US market, an increase from the previous quarter and the highest level since eToro launched its Retail Investor Beat in early 2023. At the same time, investors remain cautious about the performance of the so-called “Magnificent 7” stocks, which include Amazon, Apple, Microsoft, Meta, Tesla, Nvidia, and Alphabet.

While 13% expect the group to significantly outperform the market in 2025, 33% believe they will only slightly outperform, reflecting a more balanced outlook. Although confidence has risen, the study also highlights subtle changes in investment behavior. 

Retail Investors Regain Confidence in the US Market, eToro

The proportion of investors planning to reduce holdings in the Magnificent 7 has slightly increased compared to last year, with Meta, Apple, Nvidia, and Tesla each recording a 2 percentage point rise, while the others saw a 1 percentage point uptick. Furthermore, the number of investors unwilling to invest in Tesla rose by 6 percentage points, though Meta, Alphabet, and Nvidia recorded a small increase in investors planning to boost exposure. 

Meanwhile, views on the US dollar remain mixed. Half of retail investors have already adjusted or are preparing to adjust their portfolios in anticipation of potential long-term weakening of the dollar, up from 48% last quarter. Nevertheless, 83% maintain confidence in the dollar’s role as the global reserve currency over the next decade. Only 7% foresee its replacement, with alternatives including bitcoin, the Chinese yuan, the euro, gold, and central bank digital currencies. Finally, recession concerns are gradually easing. While global economic risks remain the top perceived threat, worry has declined to 23% from 26% in Q2. 

Inflation holds second place at 19%, while concern over local economies rose to 14%, particularly among investors in the US, UK, and Australia. According to eToro’s Global Market Strategist Lale Akoner, investors are shifting focus from global shocks to local challenges, adopting a more pragmatic outlook overall.

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