Investor confidence entering 2025 presents a mixed yet intriguing picture. On one hand, Americans are more engaged in the markets than they have been in over a decade – nearly 58% of Americans are investing in the stock market, the highest share on record. This resurgence in participation has pushed U.S. stock ownership back to pre-2008 levels, reflecting a broad return of retail investors. Overall consumer sentiment has also improved from the pessimism of a couple years prior. In fact, by late 2024 overall economic sentiment in the U.S. turned net positive for the first time since mid-2021, buoyed by rising optimism among certain groups. Major indices climbed in 2023 and inflation showed signs of cooling, factors that typically bolster confidence.
Yet caution remains a dominant theme. Surveys reveal that many investors are still scarred by recent volatility and uncertainty. About 49% of Americans say they feel safer holding cash rather than risking it in investments, a striking figure considering stocks ended 2024 with solid gains. Likewise, an annuities industry poll found 73% of investors became less likely to take financial risks over the past year – only a slight improvement from 78% the year before. In other words, nearly three-quarters of Americans admit the events of the last 12 months (from inflation surges to market swings) have made them more risk-averse. Concerns about the economy run high as well. When asked about threats to their financial future, Americans most frequently cite inflation (80% worried it will hurt their finances), followed by a potential recession (72%), the upcoming 2024 presidential election (72%), and even cybercrime (63%), among other risks. This undercurrent of worry tempers the optimism and keeps confidence in check.
Notably, these trends aren’t just confined to the United States. Globally, consumer confidence has been on the upswing as many countries rebounded from the pandemic economic slump. Morning Consult’s Index of Consumer Sentiment rose in 33 of 43 countries through late 2023, thanks to easing inflation and improved growth outlooks in regions like Europe and Asia. Major economies in Europe saw sentiment increase in 12 of 16 tracked countries as energy prices stabilized. That said, global investors still harbor some skepticism about the road ahead – in one international fund manager survey, a net 42% expected a global recession in the next year (the highest share holding that view since mid-2023). In short, investor confidence in 2025 is cautiously optimistic: participation in investing is up and outright pessimism has ebbed compared to 2022, but persistent economic anxieties are causing many to remain vigilant and defensively positioned.
Generational Trends in Confidence and Behavior
Confidence levels vary significantly by generation, with each age group navigating the markets a bit differently. Broadly, all generations feel more empowered financially than prior generations did – around 60–66% of Gen Z, Millennials, Gen X and Boomers each believe they have a better shot at achieving their financial goals than the generations before them. This is a striking indication that younger and older investors alike sense that modern tools and opportunities give them an edge their parents or grandparents didn’t have. The reasons differ by age: for Gen Z investors, the top driver of their confidence is improved access to investing (think easy-to-use investing apps, commission-free trades, etc.). This tech-savvy cohort has been able to start investing remarkably early – Gen Z adults today report starting to invest at just 19 years old on average, nearly half the age at which Baby Boomers began investing (35). It helps that more than a quarter of Gen Z were actually taught about investing in school, far more than older generations ever were. All of this exposure means Gen Z is jumping in sooner: about 45% of Gen Z (adults in their early 20s) are already investing in some form, a participation rate not far behind older groups.
Millennials and Gen X are in their prime earning years and have moderate confidence levels, though shaped by different experiences. Millennials (now late 20s to early 40s) started investing around age 25 on average, earlier than Gen X did, and about 54% of Millennials are active investors today. This generation came of age during the 2008 financial crisis and the subsequent bull market, so they’ve seen both crashes and recoveries. Many are cautiously optimistic: a majority say they’re doing a better job financially than their parents, yet they remain alert to risks. Generation X, now mostly in their 40s and 50s, had a later start (around age 32 on average) and about 58% of Gen X invests now, roughly on par with the national average. Gen X appears the most anxious about economic threats – in one survey they were more worried about a U.S. recession than any other generation (76% citing it), slightly higher than Millennials (72%) or Boomers (69%).This makes sense given Gen X is inching closer to retirement and particularly sensitive to anything derailing those plans.
Baby Boomers (late 50s to 70s) show an interesting mix of confidence and concern. Boomers actually voiced the highest optimism that today’s environment offers more ways to build wealth – 68% of Boomers say there are more wealth-building opportunities now than in the past, a higher share than any younger group. Many Boomers feel financially better off or on par with where their parents were at the same age, reflecting confidence borne of experience. At the same time, Boomers are the most worried about political uncertainty upsetting their finances: 79% are concerned the 2024 presidential election could negatively impact their financial future. Having lived through multiple market cycles, Boomers tend to invest at slightly higher rates (about 63% of Boomers are invested today) and often have more at stake, so they keep a close eye on policy changes.
While participation and baseline optimism are relatively high across generations, risk attitudes diverge sharply between young and old investors. For example, younger investors are more adventurous in some ways – 43% of investors under 35 say they are likely to “buy the dip” (i.e. invest more when markets fall), a strategy that far fewer older investors (16%) are comfortable with. Gen Z and Millennials are also more open to newer asset classes; roughly 26% of 18–34 year-old investors plan to boost their crypto holdings moving forward, showing a greater appetite for digital assets than older folks. However, the young are also quicker to feel the sting of downturns – a hefty 63% of investors aged 18–34 admit they’ve become more cautious after experiencing market losses, compared to just 22% of those 55 and older becoming more gun-shy after losses. In other words, when things go south, it rattles young investors’ confidence more, likely because it’s their first exposure to volatility. Meanwhile, older investors tend to stay more even-keeled (many Boomers have “seen it all before”), but they also aren’t as eager to double down on risky bets. All generations, though, share at least one common concern: inflation. Surveys find that inflation is ranked as the number-one threat to long-term financial security by investors of all ages, which explains why combating rising prices (and the Fed’s interest rate response) has been a focal point for everyone from Gen Z first-time investors to retired Boomers.
Demographic Disparities: Income and Gender
Confidence in investing is also heavily shaped by an investor’s income level and gender, often determining their access to markets and comfort with financial risk. Income remains one of the strongest predictors of stock market participation and confidence. Higher-income Americans are far more likely to be invested and optimistic. Recent data shows 84% of U.S. adults in households earning $100,000 or more own stocks, either directly or through retirement accounts, whereas among those earning under $40,000, only 29% own any stocks. This gap is enormous – wealthier families are nearly three times as likely to be in the market. With that comes greater confidence in navigating finances: in a 2023 Pew survey, 4 in 10 upper-income Americans (about 40%) felt confident handling all the key financial tasks asked about (budgeting, saving, investing, etc.), compared to only 13% of those with lower incomes who felt that way. Lower-income individuals were also much more likely to say they are not confident in any financial tasks. Simply put, those with higher incomes typically have more financial education, access to advice, and cushion for risk – fostering a higher risk tolerance and belief in investing – whereas those living paycheck to paycheck often lack both the means and the confidence to invest. Encouragingly, the broad rise in market engagement since 2020 has included middle-income Americans as well, but disparities persist. (It’s worth noting that the top 10% of wealth holders still own an estimated 89%+ of all stocks by value, so the “investor class” is still skewed toward the wealthy.)
Gender gaps in investor confidence are another important piece of the puzzle, though there are signs of positive change. For many years, research has shown women on average participate in investing less and feel less confident about financial decisions than men – often called the “financial confidence gap.” The good news is that more women are investing now than ever before. A 2024 Fidelity study found 7 in 10 women (70%) now own investments in the stock market, a figure that jumped almost 20% from the year prior. The largest increases were among Gen X and Boomer women, whose stock ownership rates surged by 18% and 23% respectively in just one year. This points to a wave of women, including older women, taking charge of their portfolios – closing the participation gap with men. Women are increasingly motivated by goals like building wealth for their families: 71% of women agree investing is a way to build generational wealth for their children and heirs.
However, the confidence gap hasn’t fully closed despite these gains. Even as women pour into the market, many don’t yet feel like savvy investors. According to Fidelity’s research, women are nearly twice as likely as men to describe their investing knowledge as “non-existent.” In fact, a substantial share of women say they find investing overwhelming or intimidating. Qualitatively, women also report higher financial stress levels than men on average. This suggests that while women are making great strides in participation, there’s still a need for education and encouragement to boost confidence. Interestingly, younger women seem to be breaking the pattern to some extent: Gen Z women are starting to invest earlier than previous generations and actively seeking out knowledge (many identify as diligent “researchers” of finance). Yet even among young women, many wish they had begun sooner – over 70% of women in the Fidelity survey regret not investing their extra savings earlier in life. The gender gap shows up in advice-seeking behavior too: women are often more willing to seek professional guidance. Nearly 89% of Gen Z women either have gotten or plan to get help from a financial advisor as they build their wealth, reflecting a desire to shore up confidence by consulting experts. Men, by contrast, are statistically a bit more likely to express high self-confidence in investing (sometimes overconfidence), even though studies have shown women’s portfolios can perform on par or better due to more disciplined trading. Going forward, continuing to provide financial education and tailored support for women will be key to maintaining this momentum and closing any lingering confidence gap.
Shifts in Risk Appetite and Portfolios
Alongside these demographic trends, investors’ risk tolerance and portfolio choices have been shifting in 2025 in response to economic conditions. One notable trend has been the build-up of cash holdings during recent volatile times. By early 2024, U.S. money market funds hit record asset levels (over $6.5 trillion in Q1 2024) as many investors parked cash on the sidelines for safety and to earn higher interest. Surveys echo this cautious stance: 76% of U.S. investors report holding some cash in their portfolios (beyond emergency funds), and half of Americans outright prefer cash for safety in today’s climate. High interest rates throughout 2023 made holding cash or short-term deposits more attractive, since one could earn 4–5% virtually risk-free. It’s not surprising then that yield-bearing “cash-like” assets became a favored choice, especially for older and more conservative investors.
However, 2024 also saw a gradual rotation out of cash and back into risk assets as confidence improved. As inflation began to cool and markets stabilized, advisors noted clients starting to deploy their cash reserves. In the UK, for example, a financial advisor survey documented that by late 2024, 67% of advisors said their clients were investing or considering investing again, up from just 49% earlier in the year. Many advisors reported a clear shift: investors who hunkered down in cash in 2022–23 were tiptoeing back into equities by 2025. In the U.S., retail trading activity picked up in the latter half of 2024 as the S&P 500 rallied. Investor bullishness, while not exuberant, has rebounded from the lows – only 17% of advisors’ clients were bullish at the market bottom in late 2023, whereas about 34% were bullish by late 2024. This is still a minority, suggesting most investors are remaining neutral or cautious, but it’s a sizable recovery in optimism nonetheless. Essentially, there’s been a guarded re-entry into stocks: people are dipping a toe back in, not diving.
When it comes to portfolio reallocation, investors are reassessing their mix of asset classes in light of lessons learned. Stocks remain a core holding for most; about 58–61% of Americans hold stock investments now, and this broad exposure means stock market trends still heavily influence confidence. But investors are also diversifying. Bonds and fixed income have regained favor, especially among older investors, now that yields are substantially higher than a few years ago (a 5% Treasury is quite appealing to someone near retirement). Real estate had been the darling investment for Americans in recent years, but enthusiasm cooled a bit with higher mortgage rates – Gallup found the share of Americans naming real estate as the best long-term investment fell to 34% in 2023, down from a record 45% in 2022 as the post-pandemic housing frenzy calmed. By contrast, gold’s popularity surged during the inflation scare: the share naming gold as the top investment roughly doubled from 15% to 26%, overtaking stocks for the #2 spot in 2023’s rankings. Indeed, confidence in the stock market as the best place for long-term money was near a decade low in that survey, a sign that despite many people owning stocks, fewer were hands-down convinced stocks are superior to other assets. This sentiment likely reflects residual caution from the 2022 market downturn – people were hedging their bets, some favoring hard assets like gold or the stability of real estate.
Cryptocurrency, a much-hyped new asset class in the last boom, has seen mixed shifts. Crypto had a brutal correction in 2022, which dented confidence in it: as of 2023 about 63% of U.S. adults said they have little or no confidence that current ways to invest in crypto are safe or reliable.Major crypto scandals and volatility left the majority of the public skeptical. Still, a subset of investors (especially younger ones) remains bullish on digital assets – as noted, 26% of young investors plan to increase their crypto holdings, and overall around 17% of Americans have dabbled in crypto trading. In 2025, crypto markets have stabilized somewhat, but it’s clear that crypto is seen as a high-risk, high-reward niche rather than a foundation of the average portfolio. Many investors who rushed into crypto are recalibrating their expectations (Pew research found most crypto traders said their investments performed worse than they expected). Thus, crypto enthusiasm has cooled from the peak, contributing to a broader trend: investors trimming speculative bets and favoring assets perceived as safer or more tangible.
Putting it together, risk tolerance is slowly ticking back up from the extreme caution of a year or two ago, but it remains lower than in the pre-pandemic bull market. People are holding sizable cash buffers and diversifying, even as they tiptoe back into stocks and other investments. Portfolios in 2025 might include a bit more fixed income (for stability and yield) and still a hefty cash allocation, whereas a few years ago ultralow rates pushed everyone into stocks. Now investors have options to earn yield without heavy risk, and they’re taking advantage. At the same time, if confidence continues to improve with a steady economy, we could see more of that cash redeployed into investments – a lot of dry powder is on the sidelines, which could fuel markets if sentiment turns decidedly optimistic.
The Influence of Education and Information
A crucial factor underlying investor confidence is financial literacy and where people get their information. The data shows that many Americans feel under-equipped in financial knowledge, which directly affects their confidence. In a late 2023 Pew survey, only 27% of U.S. adults expressed confidence in their ability to create an investment plan to build wealth. Creating a budget or paying off debt were tasks a majority felt confident about, but investing was the clear outlier – nearly three-quarters of Americans do not feel very confident planning investments. Notably, this low confidence in investing skills was consistent across age groups (even older adults with more experience). It highlights a general educational gap: people simply aren’t taught enough about how to invest wisely, leaving them unsure about how to proceed or how to optimize their portfolios. Indeed, Americans point to that gap in upbringing and schooling. Pew found that only 19% of Americans learned about personal finances in K-12 school, and just 27% learned about it in college. Far more (49%) say they learned what they know about money from family and friends. While learning from family can be great if your parents are financially savvy, it can also perpetuate a lack of knowledge if previous generations weren’t well-versed in investing either. This is why states pushing for personal finance curricula in high school have been cheered by experts – the next generation of investors may enter adulthood a bit more prepared.
The rise of the internet and social media in the past decade has dramatically changed how people obtain financial information, for better and worse. On one hand, information is more accessible than ever – a third of Americans (33%) say they learned a great deal about finances from the internet.Online brokerages, financial news sites, Reddit forums, YouTube channels, TikTok “FinTok” influencers – these all provide a firehose of content on investing. This has helped demystify investing for some (especially younger) people and contributed to that surge in market participation. However, the quality of information varies widely, and discerning good advice from bad is its own skill. Interestingly, younger investors appear quite discerning about their info sources. Despite stereotypes about Gen Z getting all their advice from TikTok, a survey of Gen Z women found only 11% considered social media their most trustworthy source for investing guidance. The top source was actually family and friends (28%), followed by professional sources and personal research. This suggests that while social media is certainly a source of ideas, most young investors treat it with caution. Many are using multiple channels – they might see a concept on social media, but then verify it through their own research or by consulting a professional. In fact, as mentioned, a large majority of Gen Z women are open to getting help from financial advisors to build knowledge.
Financial media coverage also plays a role in shaping confidence. Constant news about interest rates, recessions, or market crashes can sway short-term sentiment. For example, during periods when media headlines scream about an impending recession or bear market, consumer sentiment indices often dip as investors get skittish. Conversely, media stories of market rallies and success might boost enthusiasm (recall the GameStop frenzy in early 2021, which was amplified by online forums and became a media sensation, drawing in many new investors). The impact of media is hard to quantify, but surveys do show at least 24% of Americans say they learned about personal finance from news, books or documentaries. The key is that education and clear information tend to increase confidence. When investors understand what they’re investing in and have clear plans, they feel more in control and less at the mercy of market whims. Conversely, a lack of understanding breeds anxiety – for instance, those who were never taught about investing when young are disproportionately represented among the “not confident” group. In the Schwab survey, about half of the people who lacked confidence in their investment strategy attributed it to not having been taught about investing early on by parents or schools.
Fortunately, the industry and educators are responding. Employers, brokerages, and nonprofits are ramping up financial literacy programs. Investment platforms now offer tons of free education (videos, tutorials, even simulation apps) to help clients learn the ropes. Community initiatives, like Fidelity’s “Women Talk Money” events, specifically aim to build confidence among underrepresented groups by providing guidance and relatable examples. The hope is that as financial literacy improves, the base level of investor confidence will rise in tandem – leading to more people investing wisely and feeling secure about their choices. There’s evidence this can work: states that mandated personal finance courses have seen improvements in young adults’ budgeting and investing behaviors. And Schwab’s data showing Gen Z starting earlier than Boomers did implies we’re already seeing a payoff from better access to information and tools – young investors didn’t wait until their 30s because now they didn’t have to.
Looking Ahead
In summary, investor stock market confidence in 2025 is a nuanced mosaic. The hard numbers show a greater share of Americans investing than at any time since the Great Recession, and generally people feel optimistic that they have more avenues to build wealth than past generations did. At the same time, recent economic turbulence – high inflation, rising interest rates, geopolitical events – has kept overall confidence in check, instilling a degree of caution across the board. Different groups tell different stories: younger generations are enthusiastic and starting strong, yet still finding their footing in terms of knowledge; older generations bring experience and are cautiously optimistic, yet mindful of new risks ahead. High-income households and men tend to exhibit more confident investing behavior, while lower-income Americans and many women are still catching up as access and education improve. And universally, investors are balancing the desire to grow their money with the need to protect it, leading to diversified portfolios with a bit more cash and safe assets than in the go-go days.
The coming year will test how resilient this tentative confidence is. Will cooling inflation and a strong job market lure more of that record cash hoard back into investments? Or will a potential recession or political shock send investors scurrying back to safety? Much will depend on the economic trajectory and continued efforts in financial education. For now, the numbers reveal an investing public that is engaged but vigilant – hopeful about the future, yet mindful of past lessons. If you’re an investor in 2025, you’re in good company: more people than ever are in the markets alongside you, seeking to secure their financial legacy. And armed with increasing knowledge and prudent skepticism, today’s investors are navigating an uncertain world with a healthy mix of optimism and caution – truly reflecting what investor confidence in 2025 is all about, by the numbers.