A quick resolution to the election and the Federal Reserve’s latest interest rate cut may have pushed stocks to new highs, but retail investors are waking up to a new set of concerns that are weighing down their expectations for extremely strong market returns in the near and short term. According to Investopedia’s latest survey of its readers.

More than two-thirds of survey respondents describe their mood as cautiously optimistic or upbeat, while nearly forty percent say they are at least somewhat concerned about recent market events, up eight percentage points from early October.

More than half (55%) think the stock market is overvalued, but most respondents (64%) say they don’t regularly change the amount of money they invest. A small percentage of those surveyed say they are investing more and making riskier investments due to the election results and the recent interest rate cut. 15 percent say they are investing less now due to potential recession concerns and high valuations in the stock market.

Crypto Hype Returns

President-elect Trump campaigned heavily to the pro-crypto crowd, speaking at the Bitcoin 2024 conference in Nashville, Tennessee in July. Among his promises were to make the USA the cryptocurrency capital of the world, to never sell the Treasury’s Bitcoin reserves, which total 297,000 Bitcoins today, and for the Treasury to issue its own Bitcoin. While many of these promises may never be kept, interest and prices in Bitcoin and other cryptocurrencies have increased since the election results became clear. It should come as no surprise that the number of respondents who say they now own Bitcoin and other tokens (25%) is higher than ever before.

What Are Investors Buying Now?

Over the past few months, participants have consistently chosen exchange-traded funds (ETFs), followed by stocks and index funds, as the investment product they continue to buy more of. But the cryptocurrency bug can be contagious, with 12 percent of survey respondents saying they are buying more as prices rise, ranking just below CDs.

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

Survey respondents ranked individual stocks or ETFs as the top places to allocate an extra $10,000 in holdings through most of 2024. According to Investopedia’s latest survey, individual stocks now top the list, slightly outpacing their top pick ETFs at the start of October. Cryptocurrency broke into the top 10 on the list for the first time, with 12% of respondents choosing cryptocurrency as their top choice for where to put their extra $10,000. What’s notable is that most survey respondents say asset classes, including cryptocurrencies and individual stocks, are currently overvalued.

High Tariffs Worry Investors

With President Trump’s re-election and Republicans winning Congress, investors’ concerns have shifted to the potential impact of new economic policies on their portfolios. More than half of those surveyed chose the possibility of higher tariffs as their number one concern, followed by U.S. relations with China. While inflation and the election itself have been at the top of readers’ lists of concerns all year, they are now facing the potential impact that Trump’s campaign promises of higher tariffs, lower taxes and more government spending could have on future returns.

Trump 2.0 and Investor Portfolios

Survey respondents had mixed feelings about which of the president-elect’s policies might have the biggest impact on their portfolios. Approximately 65% ​​of participants state that higher tariffs will negatively affect their returns, while approximately 70% think that lower corporate tax rates and more individual tax deductions will benefit their investments. Just over half of survey respondents think deregulation of the financial and energy markets will positively impact their portfolios.

Readers Seem Undecided About Future Stock Market Returns

While Investopedia readers are generally confident in their portfolios today, the future looks a little more uncertain. Optimism about short-term returns over the next six months is rising, but optimism about returns over the next decade has waned. About 41% of respondents believe returns will be at least 5% in the next 6 months; This is an 8 percentage point increase from early October and the highest figure seen all year. Almost two-thirds, or 67%, believe 10-year yields will be slightly lower than in early October, at least 5%.