92% of Retail Investors Held or Expanded Their Portfolios during Stock Market Sell Off

The latest Retail Investor Beat Survey by eToro, a social trading platform, found that while 64% of retail inventors held on to their investments, 28% bought the dip during the recent stock market sell off.

Only 8% sold their investment during the period, according to the quarterly survey based on a sample of 10,000 retail investors.

eToro said the survey was conducted between 7-17 June 2022 across 14 countries.

According to Ben Laidler, eToro’s Global Market Strategist, the majority of retail investors used the drop in prices to bolster their portfolios for long-term gain.

As a result, the survey said, retail investors increased their portfolio exposure to commodities by 17%, crypto by 16%, domestic equities by 16% and cash by 15%.

Other portfolio increases were: foreign equities (13%), domestic bonds (12%), foreign bonds (9%), alternatives (13%) and currencies (9%).

On the contrary, the social trading platform said retail investors’ confidence in their investments has been sliding, falling from 83% in the second quarter of 2021 to 72% as at the end of last month.

“Despite these risks, almost half (48%) of respondents plan to invest the same amount of money over the next three months and 30% expect to invest more,” eToro said.

Stock Market Sell-Off

A stock market sell-off happens when stock prices suddenly drop over a daily, weekly or monthly period.

In June, Wall Street saw its worst bear market since March 2020.

The Standard and Poor's 500 index declined by almost 6%. The index dropped by over 13% between January and April. The Dow Jones Industrial Average (DJIA) also slumped by about 5% in June.

These came on the heels of rising inflation and efforts by authorities to stem the tide.

The US Federal Reserve, for instance, hiked its benchmark interest rate by 0.75 percentage points. This is said to be the biggest increase since 1994.