Retail investors, particularly those lacking the benefit of age, can be an emotional lot – sentiment pertaining to both bearish and bullish outlooks.
As just one anecdote, I spent enough time on various Reddit investing forums soon after Liberation Day in April to come away feeling we were heading toward a 1920s style depression, bursting of the dot-com bubble and the global financial crisis all at once. Seriously, there was that much melodrama.
Conversely, plenty of retail market participants believe bull markets can be permanent conditions and that stocks don’t do anything but go up. Experienced investors and advisors know that’s not true. History confirms the average bull market lasts four to five years.
That’s not to say parents and advisors working with younger clients need to present gloom-and-doom attitudes, but they should offer perspective. Perhaps now more than ever because with the current bull market turning four years old in 2026, some retail investors may be heading into 2026 unprepared for potential pullbacks and volatility.
Optimism Abounds, Perspective Needed
To be fair to retail investors, a majority of advisors believe the bull market will continue in 2026 and more than half think equities will be next year’s best-performing asset class. However, advisors also acknowledge there will be bumps along the way. Not all do-it-yourself investors concur.
eToro’s latest quarterly Retail Investor Beat indicates 56% of global retail investors believe good times will continue for stocks in 2026. Advisors should mull that data point because eToro’s client base is heavily retail with many of them skewing younger. The survey also points out 78% of those queried are confident about their portfolios heading into next year.
“While strong fundamentals support investors’ optimism, this year has proven that market certainty is never guaranteed,” notes eToro Global Market Strategist Lale Akoner. “At a time of heightened market volatility, fueled by political and geopolitical instability, it has become essential for investors to remain vigilant and closely monitor potential risks.”
Not to put words in Akoner’s mouth, but if a non-advised market participant reading this piece may want to strongly consider working with an advisor in 2026 and beyond. For those on the fence, consider this: Advised clients are typically more confident, happier and less stressed than do-it-yourself investors.
Retail Investors Do Have Perspective
Fortunately for advisors, they don’t have to start from the ground up when it comes to providing clients with perspective. Nor do they have to push hard when advocating for balance and protective strategies because even though they’re retail investors, many are aware investing can be risky.
As eToro notes, 83% of those polled view domestic political instability or the specter of a war as potential 2026 threats to the bull market. More than a third say a recession is a risk they’re monitoring. Point is not all retail investors are wearing rose-colored glasses.
“These risks loom large as we head into 2026 because they carry the potential to reshape policy priorities, trade relationships and the global economic outlook in ways that are difficult to predict,” adds Akoner. “Retail investors understand that political outcomes can materially affect sectors, valuations and capital flows at a time when markets are assessing the durability of the current rally.”
Related: Gen X Is Finally Getting Serious About Retirement — And Advisors Can’t Afford to Miss It