Investopedia’s latest investor survey shows nearly﷽ one in four respondents say they’re investing less due to recent market moves.

Spiking bond yields, a rise in oil prices, lingering inflation and political uncertainty a꧑re creating the perfect storm for individual investors, dri𓃲ving them to seek shelter in the bank and avoid stocks. 

According to our latest investor sentiment survey of our newsletter readers, nearly one third of respondents say they are investing less lately due to recent market turbulence. Nearly two-thirds ⭕of those reticent investors believe the stock market has further to fall—a near 20 percentage point increase from our last survey in August. 

Investors Searching for More Safety

While respondents are not as worried about market declines as they were last year when fear peaked, 45% say they are making safer investments with their money, favoring CDs and money market funds in lieu of stocks. Those banking products have been in style for the past 18 months as higher interest rates have pushed up yields, offering investors a viable and safer alternative. In fact, money has been flowing out of stock mutual funds and ETFs, and into banking products like money market funds, where over $5.6 trillion is piled up on the sidelines, according to the Investment Company Institute.

Only 15% Expect 5%+ Gains in Next Six Months

1 in 5 of respondents believe the U.S. stock market will drop at least another 5% in the next six months. While this is a slight increase from our August survey, it is still lower than the levels of pessimism that hovered over the markets last year amid a bear market. Still, 13% of respondents think the market will be flat for the next six months while only 15% are expecting gains of 5% or more. As for the rest of 2023, over 20% of respondents fear the market will fall 10% or more from current levels. That’s prompting nearly half of respondents to sit on their hands and wait out the most recent bouts of stock market volatility. Only 14% say they are putting more money into the market now.

202🍸4 Presidential Election Stresses Out Inves🌜tors

Investors’ list of worries is long and complicated. Inflation, even though it has receded from its lofty heights of 2022, is still their number one concern. But politics has crept back into their psyches, as the 2024 presidential election is now their second biggest worry. Whether it is the prospect of another bitter and polarizing election akin to 2020, or the fear that a new political regime will roil markets is unclear. But it is notable that so many investors have this in the back of their mind﷽s. Concerns about a recession are their next biggest worry, followed by persistently high interest rates. The notion of “higher for longer” interest rates has finally sunk in, which is contributing to investors’ lack of enthusiasm for the stock market.

Don’t Stop Believin’...

Despite investors’ concerns about the stock market, which have persisted for over a year, Investopedia's readers are still believers in stocks for the long term. When asked which asset class they believed would yield the best returns over the next decade, respondents overwhelmingly selected U.S. stocks. Other assets like real estate, international stocks and commodities did not even compare.

A Few of Their Favorite Stocks

Not much has changed among our readers' favorite stocks since we began this survey more than two years ago. Their top-ten favorites are among the largest and most widely-held stocks on the planet, including Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Nvidia (NVDA). Coca-Cola (KO) bubbled its way into the top ten in this latest survey, and bank stocks like JPMorganChase (JPM), have notably fallen out of the list.  What’s also notable, is that our readers’ favorite stocks are also among the most heavily shorted stocks of late, according to S3 Partners. 

An Extra $10,000? Put it in the Bank, Please

While our readers are mostly stock-centric and believe in equities for the long term, they are still as inclined to put that money𓆉 in the bank and buy a CD if they had an extra $10,000 on hand. In fact, nearly one in five respondents chose CDs over stocks, money market funds, and index funds. CDs have topped the list of what our readers would do with an extra $10,000 for several months, and this survey marks the highest level of CD-interest in over a year. 

Methodology

This survey was fielded online to Investopedia readers 18+ living in the U.S. from September 21-27, 2023. Readers must currently hold and manage investments to qualify.  Participation in the survey is entirely voluntary; sample composition reflects U.S. 18+ reader base. 

• Age: 18-24 4% | 25-39 16% | 40-54 18% | 55-74 53% | 75+ 10%
• Region: South 38% | West 26% | Northeast 17% | Midwest 18%
• Gender: Man 83% | Woman 12% | Nonbinary or an identity not listed  1% | Prefer not to answer 4%
• Race/Ethnicity (multi-select): White 74% | Black or African American 7% | Hispanic, Latino or Latinx/Latine 6% | Asian 3% | Native Hawaiian or Other Pacific Islander 1% | American Indian or Alaska Native 1% | Middle Eastern or North African 1% | Another background  2% | Prefer not to answer 9%