When thinking about investors, many people imagine a person sitting in front of many computer screens, looking at charts while buying and selling multiple assets each day. But the reality is different. Most investors keep their investments for years and even decades and are only buying and selling from time to time.
Market commentary by eToro analyst for Romania, Bogdan Maioreanu
In fact, according to the latest eToro Retail Investor Beat survey, less than 3% of the Romanian investors are holding their investments for only a few days. 60% of the questioned investors are keeping their investments for years and even more than a decade. This is not a surprise since the main goal for investment for 44% of the Romanians is to retire early and for 40% the possibility to have other funds available when retired. Other important investment goals are outperforming the savings account returns, the possibility to beat inflation, to provide long-term security or to achieve financial independence.
While the markets were not particularly generous with the investors this year with the Romanian BET index showing a loss of close to 17%, US S&P 500 being down close to 22% and Nasdaq where most technology companies are listed losing almost 34%, the fact that most of the goals are long term is giving investors confidence in their portfolios. 84% of the surveyed Romanian investors declared that they are feeling confident about their investments.
The structure of investors portfolio is showing that 60% own a form of crypto asset, 55% own domestic stocks and 50% own foreign equities. Due to the increase in interest rates, 49% own domestic bonds and 35% own foreign bonds. The electronic investments platforms and apps are the preferred way to manage investments for close to 67% of the Romanian respondents. 57% are using a bank for this purpose and only 25% are using a professional advisor. At global level 63% are investing through a bank followed by 48% using an electronic platform.
The pandemic created a class of retail investors that is rapidly acquiring experience and skills. A third (35%) of the Romanian investors are in the category that started to invest in 2020 benefitting from the pandemic forced free time, with an additional 17% starting investing in the last 12 months. This makes 52% of the Romanian investors having little experience with market downturns and passing through their first bear market. Forced to learn relatively quickly, Romanian investors are quoting Google search as the first source of information about the markets followed by Social Media (Youtube, Tiktok, Instagram, Facebook), media – newspapers, online news sites , magazines) and only in fourth place personal recommendations coming from friends and family. We are different from the average responders at the global level that prefer friends and family as the main source of information.
Investment wealth takes time to build and our survey showed that 90% of the Romanian investors have less than 20.000 Euro investments in their accounts with 60% having less than 4.000 Euro. As 42% of investors are young, below 35 years, they benefit from a long time ahead to invest and fulfill their goals.