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eToro: New report shows retail investors cut back on investments to cover household bills but sentiment is more bullish for Q4

One in five (18%) retail investors are reducing the amount they invest to help cover the cost of rising household bills, but sentiment for Q4 appears more bullish, according to the latest ‘Retail Investor Beat’ from social investment network, eToro.

The study, a quarterly survey of 10,000 retail investors across 13 countries and 3 continents, found that two in five (41%) reduced the amount of money going into investments in the last three months. This is mirrored by a decline in retail investor confidence which has fallen by 17 points over the last twelve months, from 81% in Q3 2021 to 64% in Q3 this year.

Whilst one in five (18%) of all retail investors are cutting back on investments to pay for rising household bills, 16% are doing so to build up emergency savings and 12% are holding onto cash, ready to invest when markets start to rebound.

Despite worsening market conditions eating into confidence, those looking to reduce the amount they invest in Q4 is expected to ease to 31%, with 69% either planning to invest the same amount of money or more over the next three months – suggesting retail investors are feeling less bearish about Q4.

“Retail investors are facing a cocktail of harsh market conditions, rising bills and more punishing mortgage rates so it’s little wonder that many have switched priorities,” comments Ben Laidler, Global Market Strategist at eToro.

“Confidence has unsurprisingly taken a hit in the last year, yet it’s admirable that the majority remain positive, something which speaks to the resilience of this group. There may also be a silver lining to the drop in investor confidence as it can be an important contrarian indicator that often signals we are near a market bottom. If confidence levels are already very low then investors are less likely to be surprised by further bad news, and even a little bit of good news can go a very long way in driving renewed market interest.”

Inflation remains the biggest concern for retail investors for the second quarter in a row, with 24% citing it as the main risk to their portfolios, followed by the state of the global economy (22%).

Given these risks, many are pivoting to a more defensive stance, with those holding cash jumping from 26% to 46% in a year, while the number of investors holding energy stocks, traditionally a hedge against inflation, is set to rise 4% in the next three months (to 51%). Meanwhile, those retail investors with money allocated to the financial services and industrial sectors (both typically cyclical and non-defensive) are set to drop from 65% to 57%, and 45% to 41% respectively.

The data also shows that the majority of retail investors have a long-term mindset, with two thirds (63%) looking to hold an individual investment for a time frame of years or decades, whilst just 3% identify as day traders. Supporting this, a third of respondents highlight securing long term financial security as their main goal for investing.

“Maintaining a long term perspective gives you a huge advantage in volatile markets and could give this group an edge over institutional investors. It is also a very different picture to the one often painted of retail investors, as FOMO-driven speculators, or dumb retail money buying high and selling low.

“The explosion of retail investors in 2021 transformed the status of this ever-growing section of the market. Yet misperceptions persist of retail investors as short term day traders who don’t understand the markets. This clearly isn’t the case, with most holding onto assets for years, whilst also responding to market conditions when necessary by adjusting their portfolios,” adds Laidler.

Find out more about the report here.

New models for the future of reusable consumption

Currently 50% of global plastic production is created for single use and only 14% of global plastic packaging is collected for recycling. There is an urgent need to abandon single-use items and move towards reusable models as an integral part of the reduce-reuse-recycle agenda.

‘Reuse’ is a production and consumption model in which consumer items are designed to be used several times, generating added value across the economy.

The World Economic Forum’s Platform for Shaping the Future of Consumption and Kearney have published the Future of Reusable Consumption Models report in which they analyze 3 scenarios showing how much plastic waste could be reduced from ocean and landfills if a reuse model is applied.

Image: Kearney analysis, World Economic Forum, Euromonitor, BIS, Resource Recycling, Greenpeace, Rethink Plastic, We Choose Reuse, legifrance.gouv.fr, Deutsche Umwelthilfe, Zero Waste Europe, Science Magazine

The report addresses some of the challenges the public sector has faced regarding reusable consumption, and aims to give a clear picture of an alternative plastic waste-reduction model.

The study is part of the World Economic Forum's Consumers Beyond Disposability initiative, which focuses on innovative reuse solutions, and has been working to test and scale such solutions.

Read the report here

Ericsson explores future lifestyle challenges and opportunities for consumers

As the peak of the pandemic appears to be passing, there is opportunity for the global community to move toward a greener, more equitable and digitally inclusive future.

A new study by Ericsson analyzes consumers' experiences, concerns, challenges and opportunities around their lifestyles and technology, in the context of the current COVID-19 pandemic and beyond until 2025

The Future of Urban Reality report identifies six key trends:

  • Living through the pandemic is causing consumers to prioritize differently.
  • Consumers look to a future filled with opposing predictions.
  • Convenience will come at the cost of privacy.
  • Local shopping will lead the way.
  • Half of consumers express a concern for climate change and pollution, yet 67% are looking to increase their leisure travel going forward.
  • Consumers will have added 10 hours per week of online time, and 2.5 more services to their daily online activities as they enter the next normal.
The share of consumers who predict a growth in uptake of e-learning platforms for higher education and upskilling
The share of consumers who predict a growth in uptake of e-learning platforms for higher education and upskilling

New Forum paper 'The Resiliency Compass' shows how to navigate supply chain disruptions

The Resiliency Compass: Navigating Global Value Chain Disruption in an Age of Uncertainty

Manufacturing companies have been forced to adapt to COVID-19, and the challenges are far from over.

An acceleration of megatrends including climate change, geopolitical tensions and emerging technologies calls for continuous upgrades of contingency plans. However, only 12% of companies are sufficiently prepared for future global value chains disruptions.

Supply-driven disruptions are too large for any single entity to address alone. We need a global manufacturing community and new public-private collaborations to successfully navigate the future of value chains.

—Mourad Tamoud, Chief Supply Chain Officer, Schneider Electric
Image: World Economic Forum & Kearney

Read more here.

The World Economic Forum, in collaboration with Kearney, have mobilized the global manufacturing community to identify measures that will build resilience across manufacturing and supply systems.

The paper summarizes insights from senior executives and public-sector leaders and introduces the resiliency compass, a new framework for organizations to accelerate the resilience-building process and define new priorities and actions needed to prepare for and respond to future disruption.

Credit Suisse: 2021 Global Wealth Report highlights growing wealth gap

Credit Suisse has released its 2021 Global Wealth Report, highlighting growing disparities between rich and poor. Despite the economic woes of the pandemic, the number of millionaires increased by 5.2 million to 56.1 million globally. Reasons include soaring house prices, recovering stock markets and low interest rates.

The report explains, "Reassured by the prompt action of governments and central banks, financial markets regained confidence and the losses in equity markets were largely reversed by the end of June. That much was understandable.

"But what happened in the second half of 2020 was unforeseen. Share prices continued on an upward path, reaching record levels by the end of the year. After initially pausing to take stock, housing markets were also infected by the prevailing optimism, and house prices rose at rates not seen for many years."

Read the report here.

AB InBev: new podcast launches to fuel recovery

How will the world’s biggest beer company assist the global recovery?

Listen to AB InBev's new podcast to hear how they’re ensuring a healthy and sustainable recovery with a guest appearance from Kirstine Stewart, Lead Future of Media Entertainment and Sport at the World Economic Forum.

The podcast, hosted by AB InBev’s Global Head of Reputation Elaine McCrimmon, brings together leaders from across business, marketing and civil society to explore the theme of ‘Recovery’.

dentsu: Consumer Vision

dentsu has produced new analysis on post-pandemic consumption. The company highlights four themes that will shape the coming decade, as well as the concept of 'Inclusive Intelligence'.

Visit the Consumer Vision microsite to read more. Here you can find links to the reports, which are based on in-depth interviews with world-renowned futurists, academics, authors and experts, together with multiple proprietary consumer surveys conducted by dentsu.

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