While one might think that the inflation and market fluctuations caused by the war in Ukraine have driven individuals away from the financial markets, the opposite is true.
Despite an uncertain environment, dominated by inflation and the resulting tightening of central bank monetary policies, individuals will continue to invest in the stock market, including younger people. According to the OpinionWay survey for Fortuneo, more than 80% of stock market investors believe that the markets remain an interesting investment over the medium and long term. Contrary to what one might think, inflation can even prove to be a driving force for investment: 68% of individual shareholders say that investing in the stock market is a way to supplement their income.
Claire Castanet, Director of Investor Relations for the AMF (Autorité des marchés financiers), points out that “companies that pay dividends or whose shares are easy to buy and sell attract more investment from individual shareholders”.
Grégory Guermonprez, director of Fortuneo, came to the same conclusion: in total, 44% of the online bank’s customers are looking for dividend-paying investments.
Who invests?
“You are not going to invest in the same way depending on whether you are a student, a young employee or a senior professional, because your income and expenses are not the same,” explains Philippe Guillot, director of markets and data at the AMF. Younger people “will invest more frequently than their elders in companies outside Europe,” says Claire Castanet. For example, the US market and tech companies are highly sought after by these new investors.
Young people are also more inclined to make programmed investments, which are better suited to smaller budgets and which make it possible to “smooth out the investment over time by regularly putting a certain amount of money into the stock market”, stresses Claire Castanet.
Older people prefer “sure values”, in particular Cac 40 companies.
In terms of the amount invested, Philippe Guillot states that the average transaction amounts to 2,600 euros for a typical client of a traditional bank. The followers of neo-brokers (a new generation of stock brokers, accessible only via a mobile application), such as eToro or Trade Republic, invest less, with an average amount of 700 euros.
In the third quarter of 2022, however, the AMF noted a 35% drop in the number of investors who had carried out at least one transaction, either buying or selling shares, compared with the previous quarter. “This wait-and-see attitude can be interpreted in different ways,” says Philippe Guillot. “It could mean that individual shareholders are cautious about inflation, or it could mean that investors are satisfied with their current positions and do not want to change them for the time being.”
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Featured photo : © Sarinyapinngam/ Getty Images
