Retail investors face a complex landscape in
2024, amid economic uncertainty, artificial intelligence (AI) innovations, and
the upcoming US election. While AI captures the media spotlight, retail
investors seem more cautious about its long-term potential. This is according
to the latest retail investor report by Public.com, which also highlighted that
diversification remains a primary focus among investors.

AI Hype Fails to Excite Retail Investors

Despite AI-related companies, such as NVIDIA and
OpenAI, dominating the financial news cycle, retail investors are not rushing
to invest in AI-driven stocks. According to the survey, only 35% of investors
say that AI technology excites them. Although a slight majority, 52%, are bullish on AI
company performance, only 30% of investors have purchased stocks based on AI
capabilities.

Retail investors remain split on their outlook for the
economy. When surveyed, 35% expressed pessimism, 26% were optimistic, and 39%
remained neutral. These mixed feelings seem to reflect broader market
uncertainties, such as fluctuating interest rates and Federal Reserve actions.

Interestingly, 50% of investors reported that the
Federal Reserve’s economic data directly impacts their decisions, while the
other half said it did not.

One key factor influencing investor sentiment is the
Federal Reserve’s decision to cut interest rates. Nearly 43% of retail
investors believe that rate cuts will shape their future investing strategy,
signaling that many see monetary policy as a critical indicator in uncertain
times.

Unlike AI, the upcoming 2024 election appears to have
minimal impact on retail investors’ strategies. A large majority, 63%, report
that their investment plans will remain unchanged regardless of the election’s
outcome.

The Future of Research

While retail investors remain wary of AI-driven
companies, they are increasingly looking to AI tools to aid their research.
Many see AI as a valuable resource for analyzing market trends and processing
large amounts of financial data quickly. 64% of retail investors believe that AI will
become a standard tool in the near future, and 50% are likely to use AI to
process financial information.

Currently, traditional tools such as Yahoo Finance and
Google Search remain more popular than AI-driven platforms. However, as AI
technology evolves, more investors may turn to these tools to help inform their
decisions.

One of the most significant takeaways from the report
is that retail investors continue to prioritize diversification. This trend,
which emerged last year, remains a key strategy for 47% of investors, while
only 18% said they were not diversifying. Fixed-income products have gained popularity, with 22%
of investors showing increased interest in this asset class, particularly as
economic conditions fluctuate.