Individuals are far more confident in their investments than professionals and are predicting almost 15% long-term returns, Natixis survey shows

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Traders and investors are focused on US inflation.

  • Individual investors expect to make more money from markets than professionals, according to a survey from Natixis.
  • The survey found that on average, they expected 14.5% returns in the long run, compared to 5.3% projected by financial professionals.
  • Topping the list of investor concerns was market volatility, followed by a lagging recovery and inflation.
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Individual investors around the world expect to make substantially more money from markets over the long term than professionals do, according to an annual survey from Natixis.

The survey – which gathered responses from 8,550 individual investors globally with at least $100,000 in assets – found that on average, they expected 14.5% returns in the long run, after adjusting for inflation. That compares to the 5.3% long-term returns financial professionals surveyed by Natixis say is viable.

In the shorter term, individual investors in the US expect 17.5% real returns in 2021, two-and-a-half times higher than the 6.7% real return professionals are anticipating. In the UK, the gap was even bigger – an expected 14.1% real return for individuals versus 4.6% for professionals.

The survey also looked at overriding anxieties for investors. Topping the list globally was market volatility, followed by a lagging recovery and inflation. Volatility was also the top US concern, with potential tax increases coming in second.

Political dysfunction was a top five worry in America and Hong Kong but not globally.

Compared to the average US investor, millennial investors in America were more likely to invest more, trade online, and open up margin accounts. By contrast, the majority of baby boomers made no change to their investments.

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Company executives are reportedly using Clubhouse to woo individual-shareholders as retail investors become a stronger force in the stock market

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  • Corporate execs are using audio-conferencing app Clubhouse to directly talk to retail investors.
  • It’s a move to recruit more individual stockholders after decades of mutual funds dominating portfolios.
  • CarParts.com used Clubhouse to field questions from retail investors after its earnings report, per the Times.
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Corporate executives are using audio-conferencing app Clubhouse to directly communicate with retail investors, according to reporting from the New York Times’ Matt Phillips.

After hosting a post-earnings report conference call with Wall street analysts, executives at CarParts.com turned to Clubhouse to field questions from a group of over 2,000 listeners, the Times reported. Audience members asked questions like: How does the business work? Are CarParts.com shares worth buying?

It’s a move that appears to be an effort to communicate more directly with retail investors and recruit more individual shareholders after decades of mutual funds dominating investor portfolios.

CarParts.com’s chief financial officer and chief operating officer called the Clubhouse session an experiment.

“We’re trying to disrupt the way people fix their cars,” he told the Times.”Is there a way for us to disrupt how retail investors communicate with management?”

Retail investing boomed in 2020 as people stuck inside their homes and fueled with extra stimulus cash turned to commission-free apps like Robinhood during the pandemic. The amount of individual stock ownership also grew to the highest level since 2014. According to the Federal Reserve, American households bought roughly $211 billion in individual stocks last year.

Whether that trend of individual stock ownership will continue could depend on the investor fanbase that companies build, and Clubhouse is one avenue executives are using to get closer to retail investors.

Though a recent note from JPMorgan’s global markets strategy team says that US retail investors are rotating away from buying individual stocks and stock options and towards buying more traditional equity funds, as was the case before the pandemic.

During the first week of April, stock ETFs saw strong inflows of $18 billion, JPMorgan noted. Meanwhile, measures of call option buying that rose to a record high in January have begun to subside over the past two months, a sign that retail investors are less willing to invest in call options on individual stocks. Similarly, JPMorgan found that equity baskets containing stocks popular with US retail trading platforms have also slowed over the past two months.

JPMorgan noted that monitoring retail flows into equity funds will be an important metric for determining the state of the individual stockholder.

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Over 50% of US investors think the stock market is rigged against individuals, a Bankrate survey finds

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A woman walks past the New York Stock Exchange (NYSE) at Wall Street on November 16, 2020 in New York City.

  • 56% of investors surveyed by Bankrate say they strongly agree or somewhat agree that the stock market is rigged against individual investors.
  • Meanwhile, 41% of Americans surveyed who don’t have any money invested in the stock market also agreed with the notion.
  • The survey sheds a light on recent retail investor sentiment following the Reddit-driven trading surge in January.
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Over half of US investors think the stock market is rigged against individuals, according to a survey of 2,525 Americans from Bankrate.

In a February study, 56% of investors surveyed and 41% of non-investors either “strongly agreed” or “somewhat agreed” with the statement: “The stock market is rigged against individual investors.”

Overall, 48% of American adults surveyed either somewhat or strongly agreed with the statement. More than 18% strongly agreed with the statement, and roughly 29% somewhat agreed. Meanwhile only 13% disagreed with the statement, with the rest remaining neutral.

The results come after the Reddit-driven market frenzy in January that saw Robinhood halt trading of many “meme stocks” stocks, prompting retail investors to argue they’re at a disadvantage.

The Bankrate survey revealed that more than 39 percent of American adults had no money invested in the stock market either before the pandemic or currently.

Other findings include:

  • 20% of investors said they’re investing more now than before the pandemic, with younger investors adding more than older cohorts.
  • 39% of American adults had no money invested in the stock market before the pandemic or currently.
  • Investors who identified as Reddit users were more than twice as likely to invest more now than less now compared to pre-pandemic.

The Bankrate study was conducted via online interview by YouGov Plc from Feb 24-26 2021. 2,525 adults were surveyed and data was intended to be representative of all US adults.

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