Younger investors may lead the charge into financial markets in 2023, as they shake off the worst year for the S&P 500 since 2008.
That’s according to a survey released Wednesday from social investment network eToro, which found that while 2022 marked the first bear market for many less experienced investors, the younger crowd is also proving more resilient. Just 13% of 18-34 year olds say stock losses from last year have dented their investing appetite.
That compares to one third of investors in the 55 and up group — that much closer to retirement — who reported that the bear market has cut their investing appetite, according to the survey that covered the fourth quarter of 2022.
Overall, eToro said many investors view 2022’s market and economy as a learning experience that has helped them improve their approaches. Some 19% plan to invest the same amount or larger in the next three months, and 69% are invested in technology, despite volatility and a 33% plunge for the Nasdaq Composite in 2022.
Among other popular sectors, 63% are invested in financial services, 55% in energy and 50% in industrials, the survey found.
A 35.2% chunk of those polled say they find peace in the knowledge that markets are cyclical, while 33.9% are firm in their belief they are investing for the long run and 21.2% said the downturn last year gave them an opportunity to buy quality assets at cheaper prices.
“They’re largely looking for opportunities, while increasingly hedging in case
prices fall further. Investors are learning to look ahead of the day-to-day swings and focus on their goals, which is a great sign for the foundation of this market and individuals’ financial sophistication,” said Calie Cox, markets analyst at eToro.
When it comes to crypto assets, whose 2022 was marked by losses and the bankruptcy of major crypto exchange FTX, again age matters. When asked the main reasons for not investing in crypto or planning to, 59% of those 55 and older said it was too volatile and risky, while 28% of 18 to 34-year-olds felt that way.
The survey found that 45% of Americans say they currently invest or plan to invest in those assets because of the “opportunity to generate high investment returns.” Some 39% still view it as a “transformative asset class with a strong future.”
Cox said they didn’t see a “significant change” in allocation of crypto assets. “People see this as a pivotal moment for the crypto industry, but not for the underlying technology and concept of decentralization.”
Overall, investor morale does seem to be holding up, with 70% of those surveyed expressing confidence in their portfolios, a gain from 61% in the previous quarter. Fears about income and job security also seemed to ease, with many less worried about inflation and more concerned about the state of the economy as having the biggest effect on portfolios in coming months.
The survey polled 10,000 retail investors across 13 countries and three continents and was conducted between Dec. 14 to 24. The U.S. was among several countries that had 1,000 respondents, said eToro.