Key Takeaways:
- 21% of investors surveyed in early 2025 sensed that the end of the 2024 rally was near.
- As inflation persists, individual investors have limited their return expectations for this year, aiming to generate 7.3%.
- Nearly half fear that any problems with the Magnificent Seven could have a significant negative impact on their portfolio.
As many as 70% of retail investors worldwide were concerned about the impact of global uncertainty on their finances, well before President Donald Trump’s tariffs sent stock markets tumbling.
Between the end of 2024 and the beginning of 2025 and after a decade and a half of rock-bottom interest rates, booming returns, and relative market calm, global individual investors were already concerned that they would not achieve their long-term investment goals, according to the Individual Investors Survey 2025 from Natixis Investment Managers.
The survey, of more than 7,000 individual investors across 21 countries between February and March, shows that even before global stock markets were roiled by the US President’s tariffs, only 53% said they were comfortable taking risks to get ahead.
Investors perceive they are in a difficult situation in 2025, and it’s changing how they feel about investing, the markets, and their future. Confronted with uncertainty, the survey found that when it came to their investments, nearly three-quarters of respondents would now put safety before performance, while 72% fear increased market volatility in the future.
One in Five Investors Braced for Potential Turbulence in the Markets
Despite excellent returns in 2024, investors were already concerned about the near future at the start of this year.
Asked for their outlook on the first quarter, a small number of investors remained optimistic that 2024’s rally would continue. “Just 35% thought nothing could stop markets from going higher. Investors in Italy (47%), France (41%) and the US (41%) were most likely to hold this view”, says the report.
At the other end of the spectrum, 21% of those surveyed sensed the end was near saying “I’m getting out while I can.”
Inflation and Taxes Among the Main Concerns
In spite of its downward trajectory, inflation continues to be a major concern. Two-thirds of survey respondents say they save less money because of rising daily prices, and more than half (59%) believe inflation has eroded their earnings. As a result, 38% say it is more difficult to achieve their long-term goals.
In addition, investors are increasingly concerned about retaining what they earn. One-third of them (34%) rank taxation third among their financial fears, and 70% believe that after-tax returns are more important than gross returns, an issue that is also reflected in the services investors seek from their financial advisor. Globally, 74% of investors who use advisory services recognize the tax burden management aspect as crucial in terms of financial planning from their advisor.
Overall, according to Natixis’ analysis, “the world suddenly feels less predictable in 2025.” Geopolitics is also a source of concern as “two wars [in Gaza and Ukraine] continue to play out, trade norms in place for decades are challenged, inflation continues to loom over much of the global economy, and markets have abruptly turned volatile.”
Lower Expectations in 2025
Given the current environment, investors who responded to the survey have limited their return expectations for this year, aiming to generate 7.3% net of inflation in 2025. This is a 33% decrease from the 10.4% returns targeted last year.
Investors are also beginning to look more carefully at their current allocations, as nearly half (48%) fear that if the Magnificent Seven falters, the negative impact on their portfolio would be too great. Therefore, investors will need to think carefully about how they invest in the current environment, balancing return aspirations and risk tolerance.
Retail Investors Cautious On Crypto
Bitcoin may have passed a new $100,000 milestone in December 2024, but many investors remain cautious about entering the cryptocurrencies market.
According to the report, 32% of global individual investors currently hold crypto assets, and more than half—51%—believe bitcoin will hit another all-time high in 2025. Among those who have stayed on the sidelines, 42% admit to feeling they’ve missed out.
Optimism remains, however: “Investors think there still may be opportunity, as 44% say new vehicles – such as crypto ETFs – will make the asset class a more attractive investment", the report shows.
