Confidence in US long-term potential rises after two quarters of decline
Magnificent 7 shares see lowered retail investor curiosity
Majority (83%) of traders belief USD as international reserve forex
Wednesday tenth September 2025 – Retail traders are regaining confidence within the US market’s long-term potential after two quarters of decline and have elevated their publicity, in keeping with the most recent quarterly Retail Investor Beat from buying and selling and investing platform eToro.
The analysis, which surveyed 11,000 retail traders throughout 13 international locations, reveals that 38% now view the US because the area with the strongest long-term return potential, a 12% enhance from the earlier quarter. This reverses the development of consecutive declines of 9% in Q1 and 17% in Q2. This confidence can also be mirrored in retail traders’ portfolios. 43% now have publicity to the US market, an 8% enhance from the earlier quarter and a report excessive for the reason that begin of eToro’s Retail Investor Beat in Q1 2023.
Commenting on the information, eToro’s World Market Strategist Lale Akoner, mentioned: “Earlier this yr, heightened considerations round political instability and macroeconomic uncertainty within the US prompted retail traders to diversify extra aggressively into Europe and rising markets, typically scaling again US publicity.
“Now, as confidence within the resilience of the US financial system improves, we’re seeing a reversal of that development. Portfolios are as soon as once more tilting again towards the US, reflecting recognition that, regardless of international diversification, the American market stays the cornerstone of world investing. Retail traders are successfully balancing diversification with a transparent acknowledgment that long-term development alternatives are nonetheless closely anchored within the US.”
Growing variety of traders cut back publicity to Magnificent 7
When requested how they imagine the so-called ‘Magnificent 7’ (Amazon, Apple, Microsoft, Meta, Tesla, Nvidia and Alphabet) will carry out as a bunch in 2025, retail traders expressed a measured outlook. 13% count on these shares to considerably outperform the market, whereas 33% imagine they are going to solely barely outperform.
The info revealed that the variety of traders planning to cut back their investments has elevated marginally throughout all of the ‘Magnificent 7’ shares in comparison with a yr in the past – Meta, Apple, Nvidia and Tesla every noticed a 2 share level enhance, whereas the remaining companies skilled an increase of 1 share level. Retail traders have additionally barely decreased their publicity to all of those main US tech shares. Notably, the variety of traders who aren’t invested in or don’t plan to spend money on Tesla elevated by 6 share factors. Solely Meta, Alphabet and Nvidia skilled a marginal rise within the proportion of traders planning to extend their investments.
Lale Akoner added: “The so-called ‘Magnificent 7’ have dominated markets in recent times, however rising focus threat is prompting traders to reassess. The newest information present retail traders are trimming publicity, not as a result of they doubt the long-term potential of those firms, however as a result of overreliance on a handful of tech giants leaves portfolios weak in a risky setting.
“This shift alerts a extra disciplined strategy: traders are acknowledging the Magazine 7’s power whereas actively rebalancing to enhance diversification. It displays a maturing mindset amongst retail traders – shifting from chasing efficiency to managing threat extra strategically.”
Yr on yr adjustments in retail investor sentiment in direction of Magazine 7 (Q3 2024 vs Q3 2025)
USD stays unchallenged as international reserve forex
While retail traders proceed to organize for a possible long-term weakening of the USD, with 50% having adjusted or planning to regulate their portfolios (up from 48% within the earlier quarter), the bulk (83%) have faith within the US greenback remaining the worldwide reserve forex for the following 10 years, whether or not they imagine the greenback will weaken (33%), strengthen (22%) or stay steady (28%).
Solely 7% of retail traders imagine the US greenback will lose its international reserve standing throughout the subsequent decade. Of these 25% again bitcoin, the Chinese language yuan, or the euro respectively, adopted by gold (23%) and central financial institution digital currencies (16%).
Lale Akoner commented: “The US greenback has been the world’s major reserve forex for over 70 years. Its dominance has endured by way of varied financial upheavals, together with the collapse of the Bretton Woods system and the 2008 international monetary disaster. Regardless of the USD seeing a decline of round 9% this yr, pushed primarily by Washington’s fiscal trajectory, retail traders nonetheless firmly imagine within the USD’s pivotal function as a worldwide reserve forex. On the similar time, they’re adjusting methods to hedge towards volatility and defend long-term returns.”
World recession fears ease
The newest Retail Investor Beat reveals that recession fears are easing. Whereas the worldwide financial system and a possible recession stay retail traders’ prime perceived menace to their portfolio, concern has fallen from 26% in Q2 to ranges seen a yr in the past (23%). Inflation stays in second place at 19%.
In distinction, 14% of traders now see their dwelling financial system as the most important threat, up from 11% final quarter. Taking a rustic by nation view, US traders are probably the most involved (28%), adopted by the UK (20%), Australia (17%) and France (15%), whereas Germany, Spain, and Italy stay under the typical at 12% every.
Lale Akoner added: “Renewed confidence within the US market, a cornerstone of world monetary stability, helps clarify why fewer traders now view the worldwide financial system as the most important threat to portfolios. But this optimism doesn’t prolong to the home image. US traders stay involved about their very own financial system, reflecting proximity to political and coverage choices that amplify perceptions of threat.
“Inflation, in the meantime, stays a key concern, however has stabilised. This means retail traders are adjusting to a higher-for-longer setting and shifting their focus from systemic international shocks to native financial dynamics. The general temper is cautious however more and more pragmatic.”
ENDS
Notes to editors
About this reportThe newest Retail Investor Beat was primarily based on a survey of 11,000 retail traders throughout 13 international locations and three continents. The next international locations had 1,000 respondents: UK, US, Germany, France, Australia, Singapore, Italy and Spain. The next international locations had 600 respondents: Netherlands, Denmark, Poland, Romania, and the Czech Republic.
The survey was carried out from 5 – 19 August and carried out by analysis firm Opinium. Retail traders had been outlined as self-directed or suggested and needed to maintain a minimum of one funding product together with shares, bonds, funds, funding ISAs or equal. They didn’t must be eToro customers.
Media contactspr@etoro.com
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