A Guide to Understanding the Psychology of the Global Retail Investor
The New Investor Phenomenon: A Wave of Opportunity
The retail revolution set us all on a new course and the world has reached a watershed moment for access to capital markets—one brimming with possibility for global investors and financial services providers alike. But for many providers, the psychology behind new investors’ trades seems like an anomaly. Based on insights gathered from a survey involving thousands of investors, representing 23 countries across Africa, APAC, LATAM, the Middle East, and the U.S., our guide reveals their secrets–their motivation to participate in the markets, the tools they’re using to trade, and the tools they still need to take on the decade of the digital investor.
Key findings from our guide include:
Remote living resulted in remote investing: While capital markets were undergoing a mobile technology revolution during the years leading up to COVID-19, the sudden, total shift to remote living drastically accelerated that transformation and created opportunity for a new generation of investors. 35% of active investors got their start during the pandemic, including in emerging markets like South Korea (56%), Indonesia (53%), India (51%), and the Philippines (48%).
New investors skewed young: About half or more of Gen-Z investors opened their first account during the March 2020–August 2021 time period, with 59% of this generation opening their first account in LATAM, 68% in APAC, 63% in the Middle East, 49% in Africa, and 23% in the U.S. Across all regions, the percentage of investors with less than $10,000 who made their first investment during this period was significantly higher than all other wealth tiers.
Tech-savvy investors turned digital: Technological advances and market forces were key drivers of the new investor wave. Across all regions, more than 40% of investors opened their most recent investment account on a mobile app and 31% of traded digital assets as their first investment. Regardless of available technology, in 18 of 23 markets surveyed, the most common motivation to start investing was low account minimums.