Among every investors’ fear is a stock market crash. With several crashes that happened previously, the COVID-19 Crash of 2020 was one of the most unexpected ones. This has been brought into effect after the coronavirus outbreak occurred and affected everyone’s lives as well as the global economy.
Between February up to April, investors realized the extent to which the coronavirus could spread and negatively affect the economy as the stock market had record-setting point drops on March 9, 12, and 16.
A stock market crash gives a scare not only because of the significant losses resulting from it. More than that, what comes next after the crash and how the economy can bounce back and recover from the said phenomenon is uncertain. The stock market seems to be recovering. So, Real Research took a survey to know the investors’ sentiment regarding the stock market’s instability.
- Almost 70% of the respondents are stock market investors.
- The majority have bought stocks since the COVID-19 outbreak started.
- The New York Stock Exchange (NYSE) and NASDAQ are the most preferred stock exchanges for investments.
- Half of the total respondents chose to do day trading and swing trading.
- Around 50% think that the current economic crisis caused by COVID-19 is “significantly more serious” than the 2008 financial crisis.
- Aside from stocks, COVID-19 investments include cryptocurrencies, gold, and real estate.
- 85% are optimistic about the stock market recovery between 2021 and 2022.
From a sampling population of almost 7,000 males and females from 90 countries, almost 70% affirmed that they are stock market investors. As a matter of fact, there were more males (76.2%) than females (23.8%) who have shown interest regarding the stock market’s condition.
In line with this, the 29-39 age group (3,191) is the dominant one within the survey. Next is the 19-29-year-olds (1,635) and the 39-49ers (1,076). Moreover, these survey results come from a majority of married individuals (55.6%). In contrast, the single and independent people (41.6%) also answered.
We can therefore conclude that more males are dealing with stock investments. Moreover, 29-to-39-year-olds who can be inferred to have a stable job and form of income are interested in investing their money in stocks and probably other forms of investments as well. Overall, individuals are both showing levels of financial literacy as they display interest and involvement in stock investments.
COVID-19: An Opportunity to Buy Stocks at Lower Prices
About 66% of the respondents confirmed that they have bought stocks since the COVID-19 outbreak started. On the other hand, 34% turned out negative for any stock investments during the pandemic season.
In line with the reason for buying stocks at this time, respondents were asked if they see the recent volatility in the stock markets globally as a “threat” or an “opportunity” to buy stocks at cheaper prices. Accordingly, the majority saw the instability of the stock markets as an opportunity (44%) rather than a threat (39%).
Even with just a slight discrepancy, many still remain positive despite the stock market crash that happened earlier this year. Despite that, the number of people who think that the crash resulted in an economic crisis is still significant. The remaining 17% chose “I don’t know,” showing a lack of definite opinion regarding the current stock market condition.
Over 50% of Stock Market Investors Use NYSE and NASDAQ
When asked about their preference in which stock market exchange to use, half of the respondents have chosen the New York Stock Exchange (NYSE) and NASDAQ. In detail, 28% use NYSE while 25% use NASDAQ for their stock market activities.
Whenever someone talks about the stock market, what usually comes to mind is NYSE and NASDAQ. With a trillion-dollar worth of combined market capitalization, these two exchanges account for the bulk of stock trading in North America and worldwide.
The NYSE and NASDAQ differ by their stock transactions between buyers and sellers. The former follows an auction method (direct) while the latter allows dealers (market makers) to handle transactions.
Minors are also using other stock market exchanges such as those located in Japan, Shanghai, Hong Kong, Shenzhen, London, and Saudi. In addition, more than 10% seem to be trading on other unspecified exchanges.
Most Preferred Stock Market Trading Strategy: Day and Swing
When asked about their preference for stock market trading strategies, the leading answers say short-to-medium term investments. In particular, most preferred to do day trading (27%), followed by swing trading (25%). A significant number of traders have also selected scalping (18%) and position trading (15%) as their strategies.
Our survey results prove that active traders do believe that short-term movements and capturing the market trend are where the profits are made. Traditionally done by professional traders, day trading is when positions are closed out within the same day they are taken, and no position is held overnight. Known as the technical-based traders, swing traders buy or sell stocks as the price volatility sets in. They make use of trading rules based on technical indicators and fundamental analysis.
For quick profits, scalpers try to take advantage of small moves that occur frequently and move smaller volumes more often. Thus, they look for more liquid markets to increase the frequency of their trades. Position trading, also seen as a buy-and-hold strategy uses longer-term charts – anywhere from daily to monthly – to determine the trend of the current market direction.
COVID-19 Investments: Cryptocurrencies, Gold, Real Estate
When asked about other forms of investments done during the COVID-19 outbreak, the investors have chosen cryptocurrencies (30%), gold (27%), and real estate (18%) as their top choices.
Taking into consideration the crypto adoption trends, the majority of crypto investors own Bitcoin (BTC). On the other hand, Ethereum (ETH), Ripple (XRP), Tether (USDT), and Litecoin (LTC) are also favorable altcoin investments to add to portfolios. Digital currencies as an investment are purely based on digital.
Conversely, you can take physical possession of gold. So far, it has maintained its value and served as a hedge against inflation and the erosion of major currencies. Another profitable form of long-term investment in real estate. Real estate investing is usually considered one of the best ways to build wealth. This is due to its ample financial advantages, including positive cash flow, appreciation potential, tax advantages, and leverage.
Based on the Real Research survey results of this specific question, investors are not only limited to stocks. Amid the COVID-19 situation, they expanded their investment portfolios to both digital and physical forms to maximize their financial gains.
85% Investor Confidence: Stock Market Will Recover
The majority finds that the current economic crisis is “significantly more serious” compared to the 2008 financial crisis. However, the investors are still showing confidence, in general, that the stock market will recover eventually.
Considerably, the COVID-19 Crash of 2020 has made a huge impact on the stock market. With an increased rate of unemployment and businesses downsizing — with the worst-case scenario of liquidation and declaring bankruptcy — the stock market had a huge blow. But, months after that and with the new year coming right in, people are hopeful of a stock market recovery. 33% are “very optimistic,” 29% are “optimistic,” while 23% are “somewhat optimistic.”
Less than 15%, in total, are discouraged. As expectations on COVID-19 vaccines arise, with a new coronavirus strain recently discovered, these may have influenced the respondents’ perception. Uncertainty may be around us but signs of developments and improvements are decent signals that it will be better in the days ahead — including the global stock market.
|Survey Title||The Instability of Stock Markets: Investors’ Sentiment Survey|
|Duration||December 25-27, 2020|
|Number of Participants||7,000|
|Demographics||Male and female, aged 19 to 60+|
|Participating Countries||Afghanistan, Albania, Algeria, American Samoa, Argentina, Armenia, Australia, Austria, Azerbaijan…Bahrain, Belarus, Benin, Bolivia, Brazil, Bulgaria, Canada, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Dominican Republic, Ecuador, Egypt, Ethiopia, Finland, France, Georgia, Germany, Ghana, Greece, Guatemala, Haiti, Hong Kong, Hungary, Iraq, Israel, Italy, Ivory Coast, Japan, Jordan, Kenya, Kyrgyzstan, Lebanon, Macedonia, Malaysia, Mauritania, Mexico, Moldova, Mongolia, Morocco, Myanmar [Burma], Nepal, Nicaragua, Nigeria, North Korea, Oman, Pakistan, Panama, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Singapore, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Swaziland, Switzerland, Thailand, Togo, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Venezuela, Vietnam, and Zimbabwe.