Retail investors are cutting back on investment to cover household expenses

One in five (20%) Polish individual investors are reducing their investment amount to help cover the costs of rising household bills, but sentiment for QXNUMX appears to be closer to a bull market, according to the latest Survey "Individual Investor Pulse" carried out on behalf of the broker eToro.

In a nutshell:

• Certainty regarding investments among Polish individual investors has decreased, but more than half of them are still confident in their portfolios.
• About 20 percent. The Poles are reducing the amount of their investment to help pay for rising household bills.
• While global investors mainly hold cash and energy stocks, nearly 70 percent. Polish investors currently owns shares related to financial services and technology.
• Poles are focused on long-term investments: only 2 percent. identify themselves as day traders, 37 percent keeps investments for several months, and 49 percent. for years or decades.

Household spending stifles investment

The survey shows that half of Polish respondents reduced the amount of money invested in the last three months. This reflects a decline in consumer confidence, which fell by 26 points from 81%. in the third quarter of 2021 to 55 percent. in the third quarter of this year.

While one in five (20%) Polish individual investors are reducing their investments to pay off growing household bills, 24% it does this to build emergency savings, and 11 percent. holds cash ready to invest when the markets start to bounce. Nearly 17 percent Poles want to overpay their mortgage before moving to a higher one interest rate and an increase in mortgage payments, and 7 percent. uses extra cash to pay off any outstanding debt.

Despite the deteriorating market conditions, which negatively affect investment certainty, the percentage of people intending to reduce the amount of investment in the fourth quarter of this year will drop to 40 percent.

Polish individual investors struggle with a mixture of tough market conditions, rising inflation and rising costs of living. So it's no surprise that many investors are changing their priorities. There are many mortgage loan holders among investors, both in PLN and foreign currencies, who have recently experienced a significant increase in installments, - comments Paweł Majtkowski, market analyst at eToro.

Retail investors' confidence in the last 12 months. Source: eToro's "Individual Investor Pulse" report

Poles are mainly afraid of inflation

The greatest concern of Polish individual investors for the second quarter in a row is inflation (37%), followed by fears of an international conflict (15%) and the condition of the world economy (13%).

Despite these threats, the majority of Poles still invest in domestic stocks (51%). The most popular are technology (58%) and financial (67%) companies. In the last three months, about 9 percent. The interest in cryptocurrencies has also increased (48%).

The survey shows that most investors bet on long-term investments: 37 percent. maintains investments on a monthly basis, and 49 percent. plans for years or decades, while only 2 percent. declares that it invests every day. At the same time, 42 percent. Poles indicate ensuring long-term financial security as their main investment goal.

The long-term investment perspective in unstable markets gives the individual investor a huge advantage over those who do not have the comfort and ability to maintain a position for a long time - speculators, institutional investors or funds. Our research also shows a completely different picture of the retail investor who values ​​long-term capital raising more than the speculation he drives FOMO - fear of losing). Most investors hold their assets for years and adjust their portfolios to changing market conditions as necessary. Majtkowski adds.

The full version of the report is available here.