Polish individual investors are more likely to reposition their portfolios than global investors

51% of Polish retail investors repositioned their portfolios due to growing concerns about inflation and the condition of the Polish economy. They are more likely to reconsider their investments than global investors, 56% of whom say they have not repositioned their portfolios despite mounting concerns over inflation and the economic recovery.

• 51% of Polish individual investors admit that they have repositioned their portfolios due to growing concerns about inflation and the state of the domestic economy
• Inflation remains a major concern - 60% of individual investors consider it the greatest threat to their investments (up from 55% from the previous quarter)
• Precious metals are still seen as the best investment (55%) in the next three months

From the latest quarterly survey eToro Individual Investor Pulse, in which 6000 retail investors in 12 countries were surveyed, shows that Polish investors are worried about the surge in inflation, which 60% cited as the main cause for concern (up from 55% compared to the previous quarter). Inflation remains the biggest problem also on a global scale - 41% of investors consider it the greatest threat to their investments (up from 38% compared to the previous quarter).

However, in the face of macroeconomic and geopolitical uncertainty, Polish individual investors still rely on themselves when looking for financial stability. Almost half (45%) plan to invest the same amount or even more (27%) in the next 12 months. Only 28% plan to reduce their investments.

EToro analyst Paweł Majtkowski comments:

The rise in inflation concerns in our survey is not surprising as inflation in Poland rose from the end of July to the end of September from 5 to 5,9%. We don't have data for October yet, but it is very likely that inflation will exceed 6%. This also means that real losses are approaching 6%, which are brought by the currently ending annual bank deposits set up at an average market interest rate (assumed in 2020 at an average market interest rate). at the level of 0,1-0,2%).

Polish investors do not lose faith in the financial markets and plan to leave or increase their current market exposure. This happens all the time due to the lack of alternatives to the stock exchange, as bank deposits remain low-interest. And real estate investments are becoming more and more difficult due to rising prices and high demand.

The potential increase in the amounts invested is also influenced by the fact that 39% of Polish investors expect an improvement in their situation on the labor market in the next 12 months.

Despite potential rate hikes, retail investors are less worried about the growth prospects interest rates (22%), and consider inflation (60%), the condition of the Polish economy (40%), an increase in public debt (25%), the condition of the world economy (25%) and the international conflict (25 %).

Paweł Majtkowski adds:

The rise in inflation is so worrying for Polish investors that they are much less concerned with the rise in interest rates itself. This is a paradox because, as we know, investors in the financial market usually associate rate hikes with a drop in the attractiveness of the stock exchange. This time, however, it is more important for investors to maintain the long-term stability of the economy and to prevent inflation from falling out of control. This should bring stability to their investments in the long term.

The data show that Polish individual investors still focus on such sectors as: technology (44%, up from 42%), real estate (35%, unchanged), raw materials (29%, up from 27%) and energy (28% , up from 27%). Companies from the pharmaceutical sector were selected less frequently this quarter (26%, down from 31%).

It is surprising that 32% of Polish investors indicated cash as their current main investment choice - more than global investors (26%). Despite awareness of domestic risk and uncertainty, domestic stocks (40%), domestic bonds (28%), commodities (17%) and currencies (16%) are currently the preferred investment choices. 37% of Polish respondents indicated kryptowaluty as your preferred choice. On a global scale, domestic stocks (52%) were the most often chosen, followed by domestic bonds and foreign stocks (29% each) and cryptocurrencies (24%).

Precious metals, on the other hand, were seen as the best investment opportunity (55%) among respondents in the next three months. Metals such as copper, iron, steel (42%). Petroleum interest gains 34%, and agricultural products 25% of the respondents.

It is difficult to draw clear conclusions as to the direction of the market from our study. The more that it was carried out in September, when there were particularly many market concerns. You can clearly see that trust as the global economy and domestic market have declined, there are signs that some retail investors are starting to prepare for less favorable economic conditions.

Polish individual investors remain critical of the state of our economy, As many as 60% of respondents consider it uncertain. In the previous survey, it was 63%, so you could say we've seen a slight increase in confidence in this area. Confidence has also increased in France, Italy and Australia. While the decline took place, among others in the US, UK and Germany. This shows that individual economies have reacted to the pandemic at a different pace and are recovering from it. However, currently global issues (such as the supply chain crisis, inflation, and the US asset purchase program constraint) come to the fore and are really starting to affect on consumers. It is very possible that in the next study we will see a more uniform consensus in these results. - comments Majtkowski.