How would you feel if I said that retail investors managed to forecast some of the biggest issues threatening the global markets way ahead of the big institutional players? Well, that's what has happened, according to eToro research!
Before the omicron started to wreak havoc, a strong recovery was seen in the global financial markets. However, rising inflation all over the world and the eventual tightening of Fed policy have caused a sharp sell-off in tech stocks. And according to eToro, retail investors managed to anticipate most of these events ahead of time.
This also tells us that the retail investors of today have a lot of information on their hands which can be used to make well-informed decisions. And this research by eToro reveals that this is indeed what's happening in the financial world!
How Investors Managed To Spot The Issues
The survey revealed that 47% of investors were concerned about inflation and considered it to be the biggest threat to the financial markets and especially their investments. During the last quarter, that number was only 41% which tells us that inflation is going to have an even more impact on the world economy.
And if we look around, inflation is indeed rising around the world, and the countries like the UK, the US, and Germany are facing the highest inflation levels right now.
If we looked back just three months ago, no one could tell that inflation would be so high, especially the energy and oil prices. On top of that, the interest rate has also risen considerably, which tells us that the investors were indeed right!
Another big concern among retail investors is the rising geopolitical tension... The retail investors were already worried about rising geopolitical tension even before the Russia-Ukraine war.
Retail Investors Are Important
The contents of this survey tell us that the opinion of retail investors is indeed important, and we do not have to rely on what the big institutions think anymore!
In fact, retail investors can now make even more informed decisions thanks to the freely available information and data on the internet.