The State of Personal Investing: Q1'23

Key findings

Investors are optimistic about 2023.

Despite current uncertainty in the economy, 73 percent of Americans are planning to invest in 2023. More than half of them indicated they will invest more than they had in 2022.

The negativity in daily and weekly news cycles isn't keeping 71 percent of Americans from investing and saving for their futures. However, 29 percent of American investors indicated that negativity in the news would make them less likely to plan for their future.

48 percent of Americans plan to invest at least part of their tax refund.

Investors are hungry for guidance.

Of 76 percent seeking others’ guidance to invest, roughly 48 percent get most of their guidance from a financial advisor, and 30 percent get advice primarily from friends or family.

Nearly 1 in 10 look to TV or news publications for guidance – roughly the same number (9%) who seek guidance from online blogs or forums like Reddit.

Despite high-profile news stories in 2022 about celebrities providing financial advice, only 4 percent said they would get guidance from a celebrity or influencer.

Investors are ready for AI.

In general, the majority of Americans are optimistic about artificial intelligence. They say they are excited for it to make their lives easier and better (24%) and that it seems as if it has the potential to improve their lives (36%).

Investors are most looking forward to AI’s ability to analyze data and trends (32%) and speed up research (25%). In fact, 41 percent of respondents would make an investment decision based on guidance from AI like ChatGPT.

Eighty percent (80%) of American investors believe personalized investing advice will lead to better financial outcomes for them.

Optimism is up

It’s a new year and a fresh start–optimism is trending. While economic headwinds have continued in early 2023, more than 70 percent of Americans are still planning to invest.

In fact, they’re planning to put more of their money to work in the market than they did in 2022.

63% Plan to invest  more in 2023. 37% Plan to invest  less in 2023.

This data represents 73% of total respondents as 27% of the 1,000 surveyed indicated that they do not have plans to invest in 2023. Full findings are available on p. 19.

Despite the media's relentless coverage of bad news, more than 70 percent of Americans are investing for a better future.

Most investors are determined to meet their financial goals, even as they hear dire news about climate change, war, toxic politics, and layoffs.

However, more than 1 in 4 are too affected by the negativity of the news to invest.

Staying on the sidelines means they’ll miss out on the power of compound interest to grow their savings.

71% will save, and 29% won't save.

Americans believe in investing

Nearly half of Americans are choosing to invest a portion of their tax returns.

This is striking because many people – especially Millennials and Gen Zers – depend on their tax returns to cover the rising cost of living. (2)

48% Americans who will use at least part of their tax refund to invest. 52% Americans who will not invest any part of their tax refund.

Investors are hungry for guidance

Most investors seek professional-level advice (48%). Almost a third of investors (30%) get advice from family or a trusted friend.

Nearly 1 in 10 people (9%) trust professional news sources most. A sign of the times, online forums have secured roughly the same amount of trust, with 9 percent seeking advice from online sources like Reddit.

Despite recent high-profile headlines about celebrities giving financial advice, relatively few investors (4%) turn to celebrities or influencers.

4% Financial celebrity or influencer, 9% TV or news publication, 9% Online blog or forum, 30% Friend or family member, 48% Financial Advisor

In fact, more than 4 in 10 respondents indicated they would make an investment based solely on a recommendation from a conversational AI.

41% of Americans would invest based on AI recommendations

Investors are ready for AI

AI has come a long way since 2018, when just 25 percent of Americans trusted artificial intelligence. (3)

As AI increasingly becomes integrated into our lives, we trust its capabilities more and more – such as what AI can do for our vital financial plans.

4 out of 10 Americans said they’d trust AI to give them investing guidance, with Millennials nearly three times more likely than Baby Boomers to make an investment decision based on AI assistance.

60% Positive toward AI, 24% Neutral about AI, 16% Negative toward AI

The question isn’t if AI can help independent investors, but how.

When asked how AI can help make the best financial decisions, most investors (57%) expect AI to speed up their research and their analysis of market trends and data.

The next largest group (17%) wants AI to help them stay on track to meet their financial goals. A similar amount (15%) uses AI to get themselves up to speed on the basics of investing. And 1 in 10 Americans look to AI for investing recommendations.

11% Give investing recommendations, 15% Help understand complex financial terms, 17% Monitor investments to stay on track for financial goals, 25% Conduct research faster, 32% Analyze historical data and trends

The next generation of AI is ready for investors

When asked whether personalized investing guidance will yield better results, investors definitively (80%) said yes.

Today’s AI enables personalized investing guidance at a scale that was never possible before.

Now investors don’t need to let other people (or bots) invest for them; they can be in the driver’s seat and prioritize their own, unique goals.

80% Yes, advice tailored to my goals will yield better results. 20% No, advice tailored to  my goals will not yield  better results.

Are you ready to invest with AI?

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Whether it’s creating a full retirement plan or accessing market insights that can inform your investing decisions, with AI, investors can finally get the confidence they need plus the independence to thrive.

Learn more at magnifi.com/personal.

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This communication is provided for general informational purposes only and should not be construed as investment or tax advice. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. See IMPORTANT DISCLOSURES below.

Survey Methodology

The opt-in survey was commissioned by Magnifi the week of January 23, 2023, among 1,014 American adults aged 18 and older, and conducted online by Dynata. Respondents of the survey were selected from those who volunteered to participate in online surveys. Complete surveys were collected using the sample framework based on U.S. Census data for age, ethnicity, gender, region, and income.

Important Disclosures

This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. Investors should carefully consider the investment objectives and risks as well as charges and expenses of all securities before investing. Read the prospectus carefully before investing.

Advisory services are offered through Magnifi LLC, an SEC Registered Investment Advisor. Being registered as an investment adviser does not imply a certain level of skill or training. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State where notice-filed or otherwise legally permitted. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.

Magnifi does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.