Source: Adrian Day
August 8, 2022 (Investorideas.com Newswire) According to a MoneyTransfers analysis, individual stocks were the go-to investment vehicle in Q2 2022. 69% of investors moved their money into individual stocks, the highest for any investment tool.
MoneyTransfers’ CEO Jonathan Merry has been explaining the figures. He affirms, “The main reason for this shift is that investors are becoming increasingly confident in the stock market and are looking for ways to get more exposure. Besides, Individual stocks provide greater control over where you invest and tend to be more tax-efficient.”
Merry further attributes that shift to the underperformance of many funds. That has led investors to seek other options offering the potential for higher returns. And individual stocks offer a higher potential return than most funds, making them an attractive option for many.
Inflation is a Major Concern
Most traders have a bearish outlook on the second quarter of 2022. Just 43% feel it’s a good time to invest, while 53% have a bearish outlook. So what’s behind this negative sentiment?
One possible explanation is that many traders are concerned about the potential for inflation to pick up in the second quarter. Up to 20% of the traders have cited it as their number one worry. Rising inflation would likely lead to higher interest rates, which could pressure stock prices.
Another possible reason for the bearishness is that some traders may feel that the market has gotten ahead of itself in recent months and that a correction is overdue.
The Bulls and The Bears
The energy sector has recently been among the best performers, and traders are betting that the good times will continue. Energy stocks benefit from strong global economic growth, low interest rates, and tight crude oil supplies.
In contrast, traders are pretty bearish on real estate and consumer discretionary stocks. The housing market has been showing signs of cooling off in recent months, and many consumers are feeling squeezed by rising inflation and interest rates. Full story and statistics can be found here: Individual Stocks Were Q2’s Go-to Investment Vehicle With 69% Moving Money to Them
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