- Gold is the preferred asset for investors preparing for a weaker USD
- Europe overtakes US as the most market favored market for long-term returns
- Fears of a potential recession of the Romanian economy grow, now seen as the primary investment risk by Romanian retail investors
Amid market volatility and economic uncertainty, the latest quarterly Retail Investor Beat survey from trading and investing platform eToro reveals that retail investors see gold as the number one hedge in response to a weaker dollar.
The study, which surveyed 10,000 retail investors across 12 countries, revealed that nearly half (48%) of retail investors have either adjusted or plan to adjust their portfolios in anticipation of a weaker USD. When asked about their strategies for asset allocation in anticipation of a weaker USD, the most frequently cited response was to invest more in gold, mentioned by 29% of retail investors. This was followed by reducing investments in US stocks (25%), increasing investments in non-US stocks (24%), and holding more money in cryptoassets (24%).
Romanian retail investors are even more dynamic than the global average, with over 58% declaring that they have either adjusted or plan to adjust their portfolios in anticipation of a weaker USD. In respect to asset allocation strategies, Romanian investors favour buying more gold (27%), followed by allocating less to USD cash reserves (24%), then investing more in cryptoassets (21%) non-US stocks (20%).
Investor sentiment towards gold is bullish, with the majority (57% globally and even more when it comes to Romanian investors( 66%) expecting gold prices to rise in the next 6-12 months. 45% of retail investors at the global level and 51% of Romanian investors already hold gold positions, with over half of them having started to invest in gold within the last two years. Among those not currently invested in gold, 27% (44% of Romanian investors) are considering it.
Bogdan Maioreanu, eToro market analyst for Romania, commented: “Increasing worries over Washington’s fiscal outlook and political credibility have fueled uncertainty and tension around the dollar’s longstanding dominance, which has slipped by about 8% this year. In response, retail investors are strategically shifting into alternative, non-correlated assets such as gold, especially Romanian investors. This move demonstrates a more advanced approach to risk management, challenging the outdated stereotype of retail investors as ‘dumb money’. The survey also shows that Romanian investors learned from the past volatile markets and are adjusting more rapidly to challenging environments.”
US long-term confidence wanes, Europe gains favor
Retail investors’ trust in the US as the region with the strongest long-term return potential is declining. From 45% in Q4 2024, confidence dropped to 34% in Q2 2025, confirming the ongoing shift. Only the youngest cohort of retail investors, Gen Z, maintains the same level of optimism (45% in Q2 2025 compared to 46% at the end of 2024).
In contrast, sentiment towards Europe is improving, with 29% of investors seeing it as the region with the strongest long-term return potential, up from 20% in the last quarter of 2024. Sentiment towards returns from China rose from 24% in Q4 2024 to 26% in Q2 2025, emerging markets from 17% to 20%, Japan from 12% to 14%, the UK from 8% to 11%, and Australia from 7% to 8%.
While in Q1 for the Romanian retail investors the US market was the one favored to deliver the highest returns long term (48%), in Q2 it was Europe (43%), followed by the US (40%), China (25%), Emerging markets (17%), Japan (15%) and UK (14%). In terms of generations, Europe became a favorite among all age groups, except for Millennials, for whom the US is on par.
Bogdan Maioreanu added: “Romanian retail investors are showing greater diversification in geographies and assets, with over half having crypto assets, local stocks and foreign currencies in their portfolios. Eroding confidence in the US as a reliable source of long-term returns has pushed investors to look beyond American markets as worries over fiscal sustainability, political volatility, and broader macroeconomic risks are prompting retail investors to expand their focus and seek growth in international markets.
Optimism toward Europe is rising, fueled by declining inflation, improved consumer sentiment, and expectations of rate cuts from the ECB. When it comes to China, investor confidence is being bolstered by government stimulus measures and signs of stabilization in the property sector. With equities in both Europe and China trading at lower valuations compared to the US, investors are trying to capitalize on these opportunities to strengthen and diversify their portfolios.”
Global investors see recession as the top risk, while Romanians are concerned about the local economy
The latest Retail Investor Beat reveals that more than a quarter (26%) of retail investors globally now view the state of the global economy and a potential recession as the biggest threat to their investments, up from 18% a year ago. In contrast, inflation – the top concern a year ago – now ranks second at 19%, marking a significant reordering of investor fears.
However, quarter-on-quarter, the recent political turmoil in Romania shifted the Romanian retail investors’ perception of the biggest risk for their portfolios from the state of the global economy to the local economy. Therefore, a potential recession of the local economy is seen as the main external risk for their portfolios by 24% of investors, followed by inflation (23%) and the state of the global economy (22%).
Within specific age groups, Gen Z is most concerned about inflation, Millennials are seeing the risks induced by the state of global and local economies on par, Gen X worries more about the state of the global economy, while 30% of Boomers are worried about a potential recession in Romania.
Commenting on the data, Bogdan Maioreanu added: “The significant market volatility seen in early 2025 has understandably heightened investor caution regarding the global macroeconomic outlook. But the political turmoil in Romania, the worries about the governmental deficit, the risks of downgrade by rating agencies, and possible fiscal measures brought the worries about the state of the Romanian economy to the top of the perceived risks of Romanian retail investors. This is almost on par with inflation and ongoing uncertainty about the future of the global economy, impacted by international trade uncertainties. And we have seen these worries transcend all age groups.”
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