Here’s How Americans Are Investing Going Into 2024 — How Do Your Money Moves Compare?
Written by
Dawn Allcot
Edited by
Cory Dudak
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As Wall Street enters the “Santa Claus rally” (the week between Christmas and New Year’s, in which stocks tend to rise) you might be planning your investment strategy for the new year.
The folks at Empower recently surveyed more than 1,000 Americans who own stocks to find out their plans for 2024 stock investing. Of those polled, 79% identified as retail investors (i.e., a person who uses their own money to invest through a brokerage firm, retirement account or other fund). Although stock prices often rise in the last week of the year, 75% of those polled said they planned to purchase stock in the last month of the year. Additionally, 30% said they intend to invest in cryptocurrency.
How Do Americans Choose Stocks?
Of those who diversify their purchases based on the sector, 58% said they would put their money into tech stocks, 34% into healthcare and 29% into energy.
Roughly 20% of retail investors said that social media influenced their decision to buy “meme stocks” this year, which are brands popularized by Reddit, TikTok and other social media channels.
As retail investors continue to flock to these stocks, their share prices may be falsely inflated or not valued based on company fundamentals. In fact, 25% of those polled said they don’t read official company reports before making an investment. On the other hand, 22% said they use the company’s financial statements, along with an evaluation of the management, competitors, and market condition to make their stock picks.
Surprisingly, 90% of retail investors said they were confident in their ability to choose winning stocks. Only 70% of institutional investors said the same.
Based on the survey, 44% of stock owners said they monitor the stock market through financial news outlets, while 37% use social media. Many investors (41%) monitor a stock’s historical performance before investing, while 29% research price patterns, charts and other market indicators. Other factors of importance to investors included the perception of the sector (27%), the dividend yield and payout history (25%) and the stock’s overall affordability (19%).
Where Would Americans Invest in 2024?
Empower asked respondents how they would invest if they had $10,000 available. The largest percentage (35%) said they would put it into the stock market. Another 32% said they would put it into their retirement account.
Baby boomers and Gen Z both favored the stock market, with 60% of boomers and 44% of the youngest generation of adults preferring stocks.
Only 12% of investors overall said they would hold the $10,000 as cash reserves. However, 20% of baby boomers said they’d keep the cash.
Crypto and real estate also made the chart, with only 4% investing in crypto and 18% putting the money into real estate.
Bottom Line
If you’re just getting started in investing in 2024, you may benefit to start with an employer retirement plan, which is something 50% of stockholders said they have done to build their wealth.
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