Investors Are Gripped by Fear and Distrust, But Hold Onto Favorite Stocks

A stock-market correction, mixed messages on the future of economic policy from the White House, and a plunge in consumer confidence have driven individual investor sentiment and expectations to their lowest levels in years.

According to our recent survey of individual investors, 61% of respondents are either “worried” or “somewhat worried” about recent market events, with over 40% expecting another significant drop of 10% or more for the S&P 500 in the next three months. One-third of respondents are responding to recent market events by investing less in the stock market and 26% are investing more in money market funds. 

While the fear is real, our readers say they still own their favorite stocks, including popular names like Nvidia (NVDA), Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT). Retail investors have pumped close to $70 billion into U.S. equities and exchange-traded funds so far this year, according to VandaTrack data cited by the Financial Times. That’s way above their monthly average, even as the S&P 500 fell into a correction, and some of the largest stocks lost trillions of dollars in value.

Tariff Uncertainty and Recession Fears Top Worries

Tariffs and reciprocal tariffs against the U.S. lead the long list of investor worries, with nearly three-quarters of respondents listing them as their top concern. A lack of clear and consistent economic and foreign policy from the White House permeates investors’ concerns, as worries about a potential recession, inflation, U.S. relations with China, and weaker corporate profits round out the top five, according to the survey. W

hile the president, Treasury secretary and even the Federal Reserve have suggested any impact from tariffs could be transient, creating a one-time price adjustment, many investors fear the worst. Three-quarters of respondents now think there is at least a 50/50 chance of a recession in the next 12 months. 

Trust in Government and the Stock Market Plunges

At the heart of investors’ concerns about the safety of their investments is their trust in the current administration. Half of respondents expect the policies enacted and proposed by the Trump administration will hurt their investments over the next four years, while just 25% believe they will benefit. Nearly half, or 48%, say they trust the stock market less under the current administration, and just 37% believe the stock market will deliver returns of 5% or better over the next four years. That’s a drop of twenty percentage points from our survey results in February.

Where Are Fearful Investors Retreating?

Investors seeking safety or diversification amid the recent selloff found it in money market funds, where 26% of respondents say they have been investing more, followed by ETFs, stocks outside the U.S., and Certificates of Deposit.

Looking out over the next four years, one-third of respondents favor U.S. stocks as the asset with the best potential, followed by stocks outside the U.S., gold, private equity, and cryptocurrencies. 

What Would You Do With an Extra $10,000?

If our readers had an extra $10,000 on hand, individual stocks still remain their top investment choice, followed by ETFs. But enthusiasm for both has waned since February, while money market funds and CDs have gained in popularity as yields have remained strong. 

Paying down debt also climbed the list of what some readers would do with an extra $10,000, which may be another sign that individuals and households are feeling the burden of rising costs of living. 

Investopedia Readers’ Favorite Stocks

Individual investors remain fairly consistent with their equity portfolio holdings. Nvidia remains the most widely held stock among respondents, with over 40% indicating they still hold the chipmaker’s stock, which has fallen nearly 20% from its recent all-time high. Apple, Microsoft, Amazon, and Alphabet (GOOGL), round out the top five, which has been pretty consistent for several years. Tesla (TSLA) is no longer among their top ten as shares of the automaker have declined 40% from recent highs. 

Nvidia or Die!

Not only is Nvidia our readers’ top holding, it’s also the stock they would buy and hold for the next 10 years. Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B), is their second choice, proving that diversification and value investing are still alive and well today. It’s also the stock readers would buy today and hold long-term.