SoFi Invest Midyear Investing Report

Midway through a confusing and at times turbulent 2023, many investors are questioning how they should proceed with their investment strategy. But in this chaotic environment, what are investors expecting, where are they putting their money, where are they turning for ideas and education, and how is each investor’s age impacting their investment plans?

Read on for the full results of the first-ever SoFi Invest¹ Midyear Investing Report².

Investor’s Midyear Economic Outlook: Recession with a Side of Sunny Optimism

Following months of inflation and economic uncertainty, two-thirds of investors believe we are currently in a recession, with younger investors far more likely to hold this belief. Of those investors that don’t think we’re in a recession yet, nearly half don’t think we’ll enter recession in the next 18 months, while a quarter believe we’ll be in one by this time next year.

However, despite the recession concerns, the majority of investors (72%) reported feeling optimistic about the market, and 57% feel good about investing overall.

In fact, despite Gen Z and Millennials being most likely to believe we are in a recession, Gen Z has the most optimistic market outlook (80%), and they feel the best about investing right now (63%) while also being the least nervous (18%).

What is your current market outlook right now? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Optimistic 71.9% 80.4% 72.6% 66.3% 62.2% 74.6% 69.3% 62.5%
Pessimistic 28.1% 19.6% 27.4% 33.7% 37.8% 25.4% 30.7% 37.5%

 

How do you feel about investing right now? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Good 56.5% 63.2% 57.3% 51.4% 49.6% 63.1% 50.1% 43.8%
Bad 4.3% 4.9% 4.8% 3.8% 2.9% 4.4% 4.3% 3.1%
Nervous 22.5% 18.4% 22.3% 26.1% 25.4% 18.2% 26.8% 21.9%
Unsure 16.7% 13.5% 15.6% 18.7% 22.1% 14.3% 18.8% 31.3%

 

Although optimism may be the default for many, it is not optimism without action, as nearly half reported that they are becoming more conservative in their investment choices (48%) as they anticipate a recession.

Even optimistic Gen Z’ers are planning ahead, with 53% being more cautious than before in their investments. Right now, only a quarter of investors overall are seeing a buying opportunity, while nearly a third of Gen Z’ers and Millennials are seeing the buying opportunity of a potential recession.

How do you feel about investing right now? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
I am being more cautious 49.4% 57.1% 53.3% 44.0% 34.0% 47.7% 51.3% 34.4%
I am being more aggressive 17.4% 23.2% 20.2% 12.5% 7.3% 18.7% 15.8% 25.0%
My strategy is unchanged 33.3% 19.7% 26.5% 43.5% 58.8% 33.5% 32.9% 40.6%

 

Since the start of 2023 alone, almost half of investors report becoming more cautious in their investments, and only one-third are staying the course with their existing strategy.

However, younger generations are slightly more likely to see a buying opportunity right now, with nearly a quarter of Gen Z’ers and one-fifth of Millennials getting more aggressive. Retired or close to retired Boomers are the least likely to change course in their portfolios, with 59% not budging on their investing strategy.

Comfort, Confidence & Concerns

Though optimism may reign across age groups, investor confidence remains only at “fair” levels, with just over half (52%) of investors reporting that they feel confident in their investing decisions. Even those that aren’t feeling fully secure reported feeling at least somewhat confident (44%), leaving very few unsure investors as they face economic uncertainty.

Do you feel confident in your investing decisions? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Yes 52.4% 58.7% 54.6% 45.5% 45.8% 58.8% 46.0% 46.9%
Somewhat 44.2% 39.6% 42.1% 48.6% 50.8% 38.9% 49.4% 46.9%
No 3.4% 1.7% 3.3% 5.9% 3.4% 2.2% 4.6% 6.3%

 

Underinvestment is also a common concern, as more than half of respondents don’t feel they’ve invested enough based on where they are in life (56%). Gen X feels the most underinvested, followed by Millennials and Gen Z. On the opposite end, only a third of Boomers feel they don’t have enough invested at this point in their life.

 

Do you feel you’ve invested enough at this point in your life? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Yes 44.0% 47.6% 40.1% 35.9% 57.4% 44.8% 43.3% 37.5%
No 56.0% 52.4% 59.9% 64.1% 42.6% 55.2% 56.7% 62.5%

 

While most investors feel underinvested, “underinvestment” means different things to different generations. For instance, nearly 40% of Gen Z think they should have about $10,000 invested right now, but almost a quarter of Boomers feel they should have at least $500,000, and one-fifth feel they need at least $250,000.

How much do you think you should have invested by this point in your life? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
$10,000 22.1% 38.2% 23.3% 10.9% 5.3% 17.9% 26.1% 37.5%
$25,000 14.8% 23.1% 17.6% 8.1% 2.7% 12.7% 16.8% 18.8%
$50,000 12.6% 14.0% 17.0% 9.9% 4.4% 11.9% 13.3% 12.5%
$75,000 6.1% 8.2% 7.6% 4.2% 2.1% 6.6% 5.8% 3.1%
$100,000 14.3% 8.5% 16.2% 19.5% 13.5% 15.2% 13.4% 9.4%
$250,000 11.4% 3.6% 8.9% 18.6% 20.8% 12.6% 10.1% 12.5%
$500,000 9.3% 1.7% 4.8% 16.3% 23.1% 11.5% 7.1% 3.1%
$1 million 4.8% 1.6% 2.8% 6.1% 13.2% 5.4% 4.1% 3.1%
Over $1 million 4.7% 1.3% 1.8% 6.4% 14.9% 6.2% 3.2% 0.0%

 

But how much do people need to feel comfortable at this point? Comfort varies based on age and gender, with Gen Z having understandably lower expectations at this point in their lives and male investors feeling they need more money invested compared to their female counterparts. Nearly one-fifth of Boomers reported they need at least 1 million dollars in investments to feel comfortable at this point in their lives.

 

How much would you need in investments to feel comfortable / on track to achieve your goals? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
$10,000 11.7% 17.8% 13.8% 6.1% 3.8% 9.5% 13.8% 15.6%
$25,000 12.0% 18.5% 13.8% 6.6% 3.8% 9.9% 14.2% 12.5%
$50,000 14.0% 16.6% 16.9% 11.6% 6.1% 12.7% 15.0% 21.9%
$75,000 7.7% 10.3% 8.5% 5.9% 3.8% 8.2% 7.1% 15.6%
$100,000 14.7% 14.5% 16.8% 13.1% 13.0% 15.1% 14.3% 12.5%
$250,000 12.1% 8.0% 10.1% 16.5% 17.9% 13.3% 11.0% 6.3%
$500,000 11.0% 4.5% 8.4% 16.7% 20.8% 11.6% 10.4% 9.4%
$1 million 7.8% 4.0% 5.2% 12.6% 13.4% 8.6% 7.0% 3.1%
Over $1 million 9.0% 5.8% 6.6% 10.9% 17.4% 10.9% 7.1% 3.1%

 

Finally, when it comes to what investors are most concerned about, the number one concern is not investing enough (38%), followed closely by being too conservative in their strategy (29%) and missing out on buying opportunities right now (28%). Overall, despite concerns about the economy and a potential recession, investors are inclined to keep investing vs. selling off.

Despite often being portrayed as less eager to invest, women (41%) outpace men (35%) in being concerned they aren’t investing enough right now. Additionally, Boomers are the least concerned overall about their investments (32%).

What are your biggest concerns when you think about investing right now? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Missing out on buying opportunities 27.8% 32.3% 29.2% 26.2% 18.3% 29.5% 26.2% 18.8%
Not investing enough 38.1% 41.4% 40.1% 41.1% 22.5% 35.2% 40.7% 50.0%
Being too conservative 29.2% 29.1% 29.0% 29.1% 30.2% 29.2% 29.4% 25.0%
Being too aggressive 14.1% 15.5% 12.4% 15.3% 13.0% 15.5% 12.7% 9.4%
I am feeling good and don’t have concerns 15.2% 10.2% 12.0% 14.8% 32.4% 15.7% 14.7% 15.6%

 

Where is the money?

Halfway through the year, where are investors putting their dollars? Unsurprisingly, equities take the top spot for investments (54%), but, despite a downturn, cryptocurrency is still number two (44%). Also, surprisingly, mutual funds round out the top three (38%), edging out bonds (27%) and ETFs (21%).

The investments people made in the last year were largely influenced by generational factors, with Millennials more than three times as likely as Boomers to invest in cryptocurrency and Boomers leading the charge on mutual funds (51% vs. 38% of the overall population).

Which of the following have you invested in within the last year? (Select All) Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Equities (stocks) 53.7% 49.3% 53.6% 55.7% 59.7% 58.4% 48.9% 56.3%
Cryptocurrency 44.1% 49.9% 56.1% 39.4% 13.9% 50.4% 38.0% 21.9%
ETFs 21.1% 20.5% 25.4% 18.4% 17.0% 25.7% 16.5% 15.6%
Mutual Funds 38.2% 30.8% 31.9% 48.1% 51.1% 37.2% 39.3% 31.3%
Index Funds 16.6% 16.9% 17.0% 15.5% 17.0% 18.2% 15.1% 15.6%
Bonds 26.6% 22.7% 28.4% 26.3% 30.7% 26.5% 26.6% 31.3%
Real Estate 16.2% 20.2% 18.4% 12.7% 8.8% 16.8% 15.2% 34.4%
Options 6.3% 4.3% 6.6% 7.9% 6.9% 6.4% 6.0% 12.5%

 

There is still an education gap on certain investments. For instance, around one-third of investors don’t feel they know enough about cryptocurrency (33%) and ETFs (32%), respectively, to invest in them, and a quarter feel the same about index funds (26%).

Which of the following do you feel you don’t know enough about to invest in? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Equities (stocks) 12.1% 13.0% 14.8% 10.9% 6.1% 11.4% 12.5% 21.9%
Cryptocurrency 33.0% 26.4% 24.7% 37.0% 57.6% 27.9% 37.9% 46.9%
ETFs 31.5% 30.8% 29.4% 32.3% 35.9% 29.8% 33.0% 40.6%
Mutual Funds 19.2% 23.7% 22.1% 16.2% 8.6% 18.9% 19.3% 25.0%
Index Funds 25.6% 25.3% 25.9% 28.0% 21.9% 23.5% 27.7% 25.0%
Bonds 19.7% 20.7% 20.4% 19.8% 16.0% 19.6% 20.0% 12.5%
Real Estate 23.7% 26.6% 24.5% 23.0% 17.4% 21.5% 25.9% 25.0%
Options 17.6% 9.7% 15.1% 22.1% 31.5% 20.8% 14.3% 18.8%
None of the above 12.2% 8.6% 13.2% 11.8% 17.4% 13.8% 10.4% 15.6%

 

Generally, as investors look to where they are going to invest next, they are more interested in income-focused investments (54%) vs. growth investments (46%). While the conventional wisdom may be that older generations are more likely to be looking for income-focused investments, younger investors (55% of Gen Z and 56% of Millennials) edge out their more seasoned counterparts (51% of Gen X and 52% of Boomers) when it comes to prioritizing the search for income.

 Trading & Talking

It may seem like investing is all people have talked about since retail trading started to boom during the pandemic, with 57% of investors saying they discuss their investments with friends and family. However, this is largely dependent on an investor’s age, with Gen Z (64%) and Millennials (60%) much more likely to discuss investing openly, with Boomers (43%) least likely to partake in discussing their investments.

This behavior was possibly learned at home – while less than half the general population reported recalling their parents discussing investments, 60% of Gen Z’ers say investing was discussed growing up. The divide isn’t just generational – men are more likely to discuss their investments (61%), with women falling behind the overall average (54%).

Do you discuss your investments with friends & family? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Yes 57.0% 64.1% 60.4% 52.2% 43.3% 60.6% 53.6% 46.9%
No 43.0% 35.9% 39.6% 47.8% 56.7% 39.4% 46.4% 53.1%

 

What is holding people back from discussing their finances?

Mostly, it’s because people just don’t like to discuss their finances (66%). However, the second most-reported reason is investors don’t feel confident enough in their investing abilities to discuss it (16%), followed closely by not wanting to be seen as bragging about successful investments (13%).

 Social Media (Somewhat) Driving Portfolio Decisions

Over the last year, nearly half (45%) of investors have made an investment decision based on something they saw on social media, and investors said social media (28%) was the place they turned to most for investment education and recommendations, after financial advisors and planners (29%).

While social media may feel ubiquitous, investors reported that they aren’t making very many investment decisions based solely on social media, with 42% of investors saying they only invest based on what they see on social media about once a year. Additionally, investors aren’t investing a lot based on advice they are getting from social media – about a third of investors said they only invest $10 – 50 based on social media advice, with only 6% surpassing $100 in investments.

Despite Reddit being top of mind for investment intel, of those that use social media for investing content, TikTok (16%) and Facebook (13%) edged Reddit out for the top spots investors are most likely to turn to for investing advice and education. Looking solely at Gen Z, that number jumps to 35% for TikTok, while Instagram (19%) takes second place, and Reddit comes in third (12%).

Which social media platform do you turn to the most for investing advice or content? Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
TikTok 15.8% 35.0% 13.1% 5.1% 0.6% 10.5% 21.1% 18.8%
Facebook 13.1% 8.3% 17.2% 15.8% 9.7% 13.9% 12.5% 3.1%
Reddit 12.1% 11.8% 17.8% 11.5% 1.5% 13.5% 10.5% 25.0%
Instagram 11.9% 19.0% 14.5% 5.7% 1.7% 11.8% 12.1% 6.3%
Twitter 8.6% 9.6% 10.9% 7.1% 3.6% 11.6% 5.4% 9.4%
I don’t use social media for investing advice or watch investing commentary 38.5% 16.3% 26.4% 54.8% 82.8% 38.6% 38.4% 37.5%

 

Robo-Advisor vs. Advisor vs. Going Solo

After years of debate on the rise of robo-advisors vs. traditional financial advisors, investors are still thoroughly exploring both options. Currently, 39% of investors use a robo-advisor, and 46% are working with a professional CFP or CFA.

For investors currently using a robo-advisor, 70% of those investors also actively manage other investments outside of their chosen robo-advisor. While around one-third invest outside of their robo-advisor for convenience, nearly a quarter do it to see how their actively managed investments stack up to a robo-advisor. Interestingly, older investors like to compare their efforts the most, with Gen X (29%) and Boomers (31%) most likely to be motivated by the comparison.

But why aren’t more investors working with professionals? The number one reason is many prefer to manage their own money (20%), but the number two reason is people don’t feel they have enough money to work with an advisor (15%). Rounding out the top three, the next most common reason is investors not wanting to potentially pay fees (10%) to a professional.

However, when it comes to what would convince investors to work with a financial advisor? More than 70% of investors say they’d be more likely to work with an advisor if they saw themselves reflected across the table. This is especially true of younger investors, where 78% of Gen Z’ers and 75% of Millennials reported being more likely to work with an advisor in this circumstance.

I would be more likely to work with an advisor if I saw myself reflected across the table Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
Yes 70.6% 77.5% 75.4% 66.7% 53.2% 69.3% 71.9% 78.1%
No 29.4% 22.5% 24.6% 33.3% 46.8% 30.7% 28.1% 21.9%

 

AI & Investing: The New Frontier?

With all the chatter around Artificial Intelligence (AI), it’s no surprise that investors are interested, but many are approaching cautiously. Halfway through 2023, around a quarter of investors say they want to use AI for investing and think AI will make investing easier. However, nearly one-fifth prefer to wait until there’s more evidence before they go all in, and 40% of Boomers simply don’t trust AI to invest on their behalf.

When it comes to AI in investing….. Total 18 – 26 27 – 42 43 – 58 59 – 77 Male Female Non-binary
I’ve already used AI to invest 13.6% 16.6% 16.4% 11.7% 4.6% 15.4% 11.7% 18.8%
I think AI will make investing easier 25.5% 30.3% 30.5% 22.0% 10.9% 27.4% 23.9% 9.4%
I want to try using AI for investing in the near-future 26.0% 31.3% 27.8% 24.4% 14.3% 27.5% 24.6% 21.9%
I don’t want to use AI for investing until there’s more evidence of its success 19.2% 18.1% 15.8% 18.1% 30.2% 18.5% 19.8% 25.0%
I think AI will help make investing more accessible for new investors 13.5% 13.2% 15.0% 14.2% 9.9% 14.0% 13.2% 6.3%
I think AI will help investors maximize their returns 10.0% 8.3% 11.0% 11.5% 9.2% 11.1% 9.0% 9.4%
I don’t trust AI to invest on my behalf 19.5% 12.9% 12.9% 24.2% 39.1% 17.9% 20.8% 31.3%

 

What’s Next?

Despite recent economic uncertainty, and with more on the horizon, investors seem to be looking ahead with a healthy mix of optimism and an eagerness to prepare. They have more tools and more places to learn and discuss than ever before, and seem to be making use of these options to find new opportunities and become better investors. Each generation has its own set of challenges, needs, and wants, and the next six months will no doubt see a great amount of continued innovation and conversation about the best ways for each type of investor to position their portfolios for the future.

Looking to start investing? Sign up with SoFi Invest here¹.

Looking to learn more about investing? Read the latest articles on investing for everyone from newbies to seasoned vets alike here.

 

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2. The SoFi Invest Midyear Investing Report findings are based on an online survey of 3,448 consumers conducted by SoFi Invest in the U.S. between June 30 – July 10, 2023.

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