Stephen J. Luczo Director | Morgan Stanley
Morgan Stanley Wealth Management has published the results of its latest quarterly retail investor pulse survey. The survey highlights a rise in bearish sentiment among investors, with 51% expressing a negative outlook, an increase of 9 percentage points from the previous quarter.
Inflation has surged to the forefront of investor concerns, with 41% naming it as the main worry for their portfolios. Tariffs follow closely at 35%, and market volatility is a concern for 24% of investors.
The optimistic outlook for U.S. economic health, which supports rate cuts, has dwindled, with only 48% of investors now believing the economy can support such measures, down from 59% last quarter.
Despite these concerns, many investors are maintaining their current financial strategies. Around 37% plan no changes to their portfolios, only slightly down from last quarter, while just 17% intend to switch to cash positions.
Chris Larkin, Managing Director and Head of Trading and Investing at E*TRADE from Morgan Stanley, notes, "Despite pronounced economic uncertainty and market volatility, investors seem to be sticking with their investing plans. While optimism has faded and traders may be a bit rattled, timing the market can be a fool's errand especially as we've witnessed recent unpredicted twists and turns."
The survey also looked into investors' views on sector opportunities for the second quarter of 2025. Technology remains a popular choice, favored by 48% of investors despite a slight drop in interest. Energy continues to be seen as promising by 41% of traders, even as oil prices decline. The health care sector holds steady interest at 32% due to its potential to provide stability amid market uncertainty.
The survey conducted between April 1 and April 14, 2025, sampled 912 U.S. investors with varying levels of account management involvement. The survey possesses a margin of error of ±3.20 percent at a 95% confidence level and was administered by Dynata.
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