If you were to select an emoji that represents your current view of the U.S. stock market, which one would you choose? Nearly half of respondents to Investopedia’s latest investor sentiment survey selected 🙂, or “cautiously optimistic” as we labeled it, while 17% responded 😎, or “optimistic,” and anticipate more gains ahead.

While our "investor emoji-meter" is hardly a scientific measure of investor sentiment, it is notable that the majority of readers are feeling pretty good about the stock market and their investments. It's especially poignant given the S&P 500 hit 18 all-time highs so far this year amid lingering concerns about the upcoming election, inflation, and the highest interest rates since the global financial crisis.

Optimism at Highest Level in 12 Months

To put actual numbers behind that optimism, around two-thirds of respondents are either optimistic or cautiously optimistic. Nearly one-third, or 33%, expect the stock market to deliver higher returns over the next six months. That's a 12-month high for that level of optimism. Nearly half or 46% say their portfolios are "riskier" than they were last year, and 10% say they are investing more in cryptocurrencies like Bitcoin. 

It’s Bubbly, But That's OK

Despite the optimism, many respondents think that stocks, especially stocks related to artificial intelligence (AI) like Nvidia (NVDA), and cryptocurrencies like Bitcoin, are "overvalued." While many consider various sectors of the stock market to be a little frothy, that hasn’t stopped them from continuing to favor them in their portfolios.

What’s Really Worrying Investors?

But bubbles and concerns about valuation are not among respondents’ top concerns when it comes to their portfolios. Higher interest rates aren’t either, despite the fact that the Federal Reserve has kept interest rates at their highest levels since 2008. Politics, specifically the upcoming presidential election, is our readers’ top concern, and has been since November of 2023. 

What Would You Do With an Extra $10,000

Despite their list of concerns and worries about overvaluation, our readers’ appetite for stocks has not waned. When asked what they would do with an extra $10,000 right now, respondents selected individual stocks, exchange-traded funds (ETFs) and stock index funds as their top choices. That has been the trend since the fall of 2023, and a far cry from 2022 and the first half of 2023 when certificates of deposit (CDs) were the overwhelming top choice among respondents. 

Investors’ Top Stocks 

As for which stocks investors might buy, their current portfolios could point what is likely on their shopping list. Those portfolios look a lot like the benchmark indexes like the S&P 500 and the Nasdaq 100, and they don’t change much on a monthly, or yearly basis, for that matter. Large-cap tech, internet/communications, and consumer discretionary stocks top the list with companies like Apple (AAPL), Microsoft (MSFT), Nvidia, Alphabet (GOOGL), and Amazon (AMZN) occupying the top 5 slots. Most individual investors like to run with the herd, and our readers have remained mostly loyal to the biggest, most widely held stocks in the world.

Moving Money From Cash to Stocks

A lot has been made of the so-called "sideline money" sitting in money market accounts and money market funds for the past several years that could be rerouted to stocks at any moment and drive the major averages to more all-time highs. In fact, assets in money market funds reached $6.11 trillion as of March 13, according to the Investment Company Institute, which is a record amount.

While investors have been allocating more money to stocks in the past six months, the pile of cash in money market funds has also continued to grow, which implies investors have not fully committed to the stock market, despite their optimism. We asked our respondents if they currently held money market funds, and if so, if they planned to deploy some of those funds toward stocks in the next six months. Over 60% of respondents confirmed they held cash in money market funds, and half of those respondents indicated that they intend to divert some of it to stocks and the stock market. Whether they do that or not remains to be seen, but even if just some of them reallocate their money to the stock market, it could keep the parade of new all-time highs marching along in 2024.

Methodology

This survey was fielded online to Investopedia readers 18+ living in the U.S. from March 13-18, 2024. Readers must currently hold and manage investments to qualify. Participation in the survey is entirely voluntary; sample composition reflects U.S. 18+ reader base. 

• Age: 18-24 4% | 25-39 16% | 40-54 18% | 55-74 53% | 75+ 10%
• Region: South 33% | West 32% | Northeast 17% | Midwest 19%
• Gender: Man 83% | Woman 12% | Nonbinary or an identity not listed 1% | Prefer not to answer 4%
• Race/Ethnicity (multi-select): White 72% | Black or African American 6% | Hispanic, Latino or Latinx/Latine 7% | Asian 7% | Native Hawaiian or Other Pacific Islander 1% | American Indian or Alaska Native 1% | Middle Eastern or North African 1% | Another background 3% | Prefer not to answer 9%