- Only 9% react to market volatility by selling off their investments
- The majority (52%) of retail investors across the globe hold investments for years
- Allocation to asset classes remains stable, but investors are diversifying across sectors
- Trust in Europe to deliver long-term returns hits record highs, but declines for US
- Half of the Romanian retail investors are holding local stocks and cryptos in their portfolios
- The financial sector is the most held one by the Romanian investors, while the US stock market is viewed as the one with long-term potential
- Cash is king for 74% of the Romanian retail investors
Retail investors across the world adhere to long-term strategies to navigate market volatility, according to the latest quarterly Retail Investor Beat from trading and investing platform eToro. The study, which surveyed 10,000 retail investors across 12 countries, revealed that nearly half of the respondents (48%) stay the course and maintain their existing investment strategy during volatile times, while 23% opt to rebalance their portfolios. 12% see market volatility as an opportunity to buy more investments, and only a small fraction (9%) react by selling off their investments.
Romanian investors are somewhat similar, with 42% maintaining their investment strategies, 30% declaring that they will rebalance their portfolios, 14% looking to buy the dip, and 10% selling their investments in this current market turmoil.
The majority of retail investors are in it for the long run. 52% (59% Romanian investors) hold their positions for years, and a further 9% (4% of the Romanian investors) for decades. One in four (24% of the global investors and 27% of Romanian investors) hold assets for months, while only a small proportion of retail investors stay invested in them for weeks (7%) or days (2%).
The study also found that retail investors’ confidence hasn’t wavered. A majority (51%) believe they are on track to achieve their investment goals, an increase from the previous quarter, marking the highest percentage since Q1 2023. However, Romanian investors are more cautious. Only 38% are confident that they are on track to achieve their goals this year and 51% consider that is too early to say.
Commenting on the data, eToro’s Global Market Strategist Lale Akoner, said: “Market turbulence which surfaced earlier this year continues to put retail investors to the test, yet the data shows that they are standing by their long-term strategies, demonstrating a level of discipline that challenges outdated notions of retail investors as ‘dumb money’. Retail investors
have been steadily building their resilience, which has now manifested in sustained levels of confidence despite market volatility.”
eToro’s Market Analyst in Romania, Bogdan Maioreanu, added: “Romania was pulled down in a whirlwind of uncertainty, generated by the political outcome of the presidential elections and economic impact of Trump’s tariffs and the governmental budgetary deficit. Investors kept their strategies but are looking more cautious at the possible outcome of their investment decisions.”
Allocation to asset classes remains stable, but investors are diversifying across sectors
The percentage of retail investors holding domestic equities (52%), foreign equities (35%), and cryptoassets (35%) have remained unchanged in the first quarter of the year, while slightly higher percentages of investors are holding commodities, as well as domestic and foreign bonds. The only asset class to see a decline was cash (69%), down 1 percentage point compared to the end of 2024. Half of the Romanian retail investors are holding local stocks in their portfolio, 53% are holding crypto-assets and 36% foreign equities. Cash is still king for 74% of the Romanian retail investors.
Retail investors are also increasingly diversifying their portfolios across industries. This quarter, they are more likely to hold equities in consumer staples, up 12%, followed by mining (+9%), materials (+8%), energy (+6%), and financial services and technology (both +5%), while the proportion investing in discretionary consumer goods remained the same. Romanian investors are also diversifying into Healthcare (+11%), Industrials (+10%) and Real Estate (+10%). The Financial sector, which is the most held sector by Romanian retail investors (70%) has seen only a marginal growth (+1%). Opposite to their global average, Mining has seen the largest decrease of almost 9% in the number of investors that are having stocks of this sector in their portfolios.
Lale Akoner added: “Retail investors aren’t just holding steady – they’re making thoughtful adjustments to navigate this uncertainty. The 12% jump in consumer staples holdings suggests a tilt toward more defensive sectors. Cautiousness in the economy is also reflected in an increased diversification of their portfolios across various industries. In an uncertain policy environment, investors are hedging and prioritizing resilience over risk, with rising interest in areas like materials, mining, energy, and financials.”
Confidence in Europe rises, but declines for the US
One in four retail investors (26%) identify Europe as the region with the strongest long-term return potential, up 30% since Q4 2024. Conversely, those favouring the US market for long-term returns dipped from 45% to 41% since Q4 2024, down 9%.
The percentage of retail investors that trust emerging markets for the long run rose from 17% last quarter to 19%, Japan from 12% to 13%, the UK from 8% to 10%, and Australia from 7% to 8%. China saw a slight decline, dropping from 24% to 22% in the first quarter of the year.
Almost half of the Romanian retail investors (48%) still believe in the long-term potential of the US stock markets, 37% in the European ones, 27% in China, 17% in Emerging Markets and 15% in Japan. The percentage of investors looking long term to the US as the best performer increased by 4% while the one of investors looking at Europe by almost 8%.
Bogdan Maioreanu commented: “European markets have often been overlooked as investors focused on US growth stocks. However, with economic policy uncertainty in the US and concentration risk in broader indices, more investors are turning to Europe to diversify and protect their capital. Attractive valuations, growth-oriented policies and recent strong performance in key sectors such as defence, energy and luxury goods are driving renewed interest in the region.”
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