Market Overview

E*TRADE Study Reveals Retail Investors Remain Bullish as COVID, Recession Fears Dim

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Presidential election has become the #1 concern among retail investors heading into the fourth quarter

E*TRADE Financial, LLC today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results indicate investors remain bullish despite election jitters:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201014005491/en/

(Photo: Business Wire)

(Photo: Business Wire)

  • Bullish sentiment remains high. Half of surveyed investors (52%) are bullish, up 1 percentage point since last quarter.
  • But most think that volatility will rise as 2020 ends. Nearly two out of three investors (65%) think that volatility will rise in the fourth quarter, up 9 percentage points since the third quarter.
  • Recession and COVID fears take a backseat to the election. Over two out of five investors (44%) cite the 2020 presidential election as the risk they're most concerned about when it comes to their portfolios, up 7 percentage points since last quarter. Recession and COVID fears ticked down 6 and 5 percentage points, respectively.
  • Investors divided on which candidate is best for the market. Half of investors noted President Trump (50%) would be better for the markets, and nearly half said former Vice President Joe Biden would (44%), while 6% said neither.

"The retail investor continues to be resilient despite more than a few headwinds that could disrupt the market's bullish course," said Mike Loewengart, Managing Director of Investment Strategy at E*TRADE Financial. "Investor concern regarding the election this cycle could very well stem more from how long it will take to identify a winner, as opposed to who the winner may actually be. The market is no fan of uncertainty, and we are in unchartered territory this November. That said, investors are wise to keep in mind that election-related volatility will likely be a short bump in the road for those with a long-term investing view."

The survey explored investor views on sector opportunities for the fourth quarter of 2020:

  • Health care.Remaining steady since last quarter at 55%, investors see the most potential in health care amid the race for a COVID-19 vaccine. As fears of a second wave heat up and vaccine players complete late-stage trials, we could see some fireworks ahead.
  • IT. Interest in the tech sector remained steady at 46%. The September sell-off in tech seemingly didn't rattle investors, as work-from-home orders stay in place and reliance on this sector holds steady.
  • Consumer staples. Commonly viewed as a defensive play, this sector maintained its third position amid a prolonged road to full recovery and stalled stimulus measures.

E*TRADE aims to enhance the financial independence of traders and investors through a powerful digital offering and professional guidance. To learn more about E*TRADE's trading and investing platforms and tools, visit etrade.com.

For useful trading and investing insights from E*TRADE, follow the company on Twitter, @ETRADE.

About the Survey

This wave of the survey was conducted from October 1 to October 13 of 2020 among an online US sample of 842 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 60% male and 40% female, with an even distribution across online brokerages, geographic regions, and age bands.

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are national federal savings banks (Members FDIC). More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.

E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial, LLC. ETFC-G

ETFC

© 2020 E*TRADE Financial, LLC. All rights reserved.

E*TRADE Financial engages Dynata to program, field, and tabulate the study. Dynata provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to www.dynata.com.

Referenced Data

When it comes to the current market, are you?

 

Q4'20

Q3'20

Q2'20

Q1'20

Q4'19

Bullish

52%

51%

38%

61%

50%

Bearish

48%

49%

62%

39%

50%

Over the next quarter, do you think volatility will…

 

Q4'20

Q3'20

Increase

65%

56%

Greatly increase

19%

16%

Somewhat increase

46%

40%

Stay the same

28%

35%

Somewhat decrease

7%

8%

Greatly decrease

0%

1%

Decrease

7%

9%

Which of the following risks are you most concerned about when it comes to your portfolio? (Top 2)

 

Total

 

Q4'20

Q3'20

2020 presidential election

44%

37%

Recession

34%

40%

Coronavirus and other pandemic concerns

28%

33%

Market volatility

24%

37%

US trade tensions

17%

16%

Gridlock in Washington

14%

10%

Economic weakness abroad

11%

14%

Fed monetary policy

10%

9%

Flattening/inverted yield curve

5%

6%

Inflation

5%

2%

Softening job market

3%

4%

Other

1%

2%

None of these

2%

2%

Which candidate do you think would be better for the financial markets?

 

Q4'20

Donald Trump

50%

Joe Biden

44%

Neither

6%

What industries do you think offer the most potential this quarter?

(Top Three)

 

Q4'20

Q3'20

Health care

55%

57%

Information technology

46%

47%

Consumer staples

32%

33%

Energy

26%

25%

Communication services

25%

28%

Financials

24%

23%

Real estate

23%

23%

Utilities

22%

20%

Industrials

17%

15%

Materials

15%

15%

Consumer discretionary

15%

14%

 

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