What's Your Primary Source Of Funds For Trading And Investing?
Each week, Benzinga conducts a survey to collect data on investor trends, such as what sectors people are excited about and how investors select a stock to buy.
This week, we posed the following question to over 500 investors and traders concerning the funds that they invest with: What is the source of the funds you use to invest with?
Just over 37% of respondents said their trading funds are from their salary.
With how easy it is to access the market in 2021, more and more people are turning to trading in order to supplement their income. For people with a steady income that invest on the side, it may be worth setting a reasonable recurring investment through your broker in order to maintain your exposure to the market.
The second-highest scoring source of funds for Benzinga readers was stimulus payments, with 29.4% of respondents indicating this.
With the COVID-19 lockdowns last-spring coinciding with $1,200 stimulus checks, many people stuck in their homes turned to trading stocks in order to pass the time and generate some income.
Amid the rise of r/WallStreetBets to start 2021, these new retail traders have taken the market by storm as of late.
The next-highest scoring source of funds are gifts, coming in at 19.1%. Whether these "gift" funds are a Christmas present, birthday gift or reward for graduating high school/college, it's important to diversify these funds if putting them all into the market at once.
Furthermore, if you're a first-time investor looking to deposit a large lump-sum into a brokerage account, be sure to choose a broker that offers instant deposits so you don’t have to wait days for your money to become available.
Last but not least, 14.2% of respondents indicated the main source of their trading funds was from inheritance.
As mentioned previously, when dumping a large amount of money into the market, it's crucial to diversify across different sectors and asset classes. Furthermore, keep in mind that if you inherited actual stocks, you're not responsible for any taxes on the increase in their value from the time your relative purchased it until their death.
This study was conducted by Benzinga in February 2021 and included the responses of a diverse population of adults 18 or older.
Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from over 1,000 adults.
Henry Khederian contributed to this report.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.