While fact-checking the August issue of the SMI newsletter, I came across interesting results from an investor survey published in late 2024.
The Retail Investor Sentiment Report surveyed a representative sample of 2,016 adults, a large enough poll to provide reliable insights into "average" (i.e., non-professional) U.S. investors. The study was sponsored by the brokerage firm tastytrade, along with Finder, a comparison site for financial products such as banking, investing, and loans.
Among other things, researchers wanted to know "What prompted you to start investing?" Here's how the answers broke down. (Respondents could select more than one answer.)
👆 Friends and family members — please note that you can be influential in prompting someone to get started as an investor!
The survey found that buying individual stocks is the most popular way to invest. Surprisingly, index funds ranked fourth, despite their strong performance in recent years. (That said, if you add index funds, mutual funds, and ETFs together — they are separated in the way the question is asked — "funds" of various types would be the most popular option.)
Here's a "sign of the times": about half of all trading now happens via mobile apps.
Apps and the internet make it easy to regularly check portfolio performance, and most investors are doing just that. More than four in 10 (43%) check their investment portfolio's performance at least daily (26% daily, and 17% multiple times daily).
That's fun when the market is racing upward, but it's a recipe for angst and bad decision-making when the market changes course!
As SMI has written before, "Unless you just happen to like high levels of anxiety, it doesn't pay to follow the daily performance of your portfolio. Sure, it may seem like such information is helpful, or at least not harmful. But most of us aren't wired to process significant swings in our investments without a commensurate swing in our emotions."
Here is one more data point from the Finder/tastytrade survey — about where investors get information to help them with investing. No surprise: The answer varies significantly by age group.
Plenty of new investors
A press release accompanying the Finder/tastytrade survey noted that "[more than] half (52%) of surveyed investors have started within the last four years."
That means there are a lot of younger investors out there needing reliable information. Given the heavy reliance on social media/video by younger investors, SMI has started creating short videos for YouTube. We hope you'll check 'em out and share them via your social media accounts.
If you know a relatively new investor who might be ready for more detailed content, consider an SMI gift subscription.
