Individual Investors Brave On Despite Bubble Fears

• Three in five investors believe AI-related stocks are overvalued, with gold now ranking as the second most 'bubbly' asset amid its volatile price swings over recent weeks
• Despite bubble fears, individual investors continue to hold and favor the same stocks they view as overvalued, with portfolios resembling S&P 500 index funds and dominated by mega-cap tech companies
• The Nasdaq 100 topped investors' picks for best performance in 2026, followed by semiconductor stocks and the S&P 500, while Bitcoin ranked among their last choices

Summary: Individual Investors Maintain Confidence Despite Market Volatility and Bubble Concerns

Individual investors remain optimistic despite recent market turbulence and significant selloffs in major tech stocks, according to Investopedia's latest sentiment survey. However, 40% of respondents report concerns about the stock market and their portfolios—a slight increase from December.

Key Concerns:

Geopolitical unrest has emerged as investors' primary worry, overtaking tariffs and inflation as top concerns. This shift comes amid notable drawdowns in widely-held stocks including Nvidia, Palantir, Microsoft, and Netflix.

Bubble Perceptions:

Three in five investors (60%) believe AI-related stocks are overvalued, with Nvidia topping the list of perceived bubble assets. Gold has climbed to the second position on investors' overvaluation list, following its record highs and recent volatility. Mega-cap tech stocks also remain high on the overvaluation list as the bull market enters its fourth year.

Portfolio Holdings:

Despite bubble fears, investors continue holding the assets they perceive as overvalued. Survey respondents' portfolios mirror S&P 500 index funds, heavily weighted toward AI and mega-cap tech stocks including Tesla, Amazon, and AMD.

2026 Outlook:

Investors remain bullish on their favorite assets for 2026 performance. The Nasdaq 100 ranks as their top pick for best returns, followed by semiconductor stocks (SOX index), S&P 500, and gold. Bitcoin ranked among the lowest picks despite recent volatility.

Investment Preference:

If given an extra $10,000, individual stocks remain the top choice for deployment, demonstrating continued confidence in equities despite market uncertainty and elevated valuations.