Wild trading in ‘meme stocks’ compounded concerns.

Recent market volatility has investors gripping the wheel with both hands, but staying the course as most acknowledge that we are in an asset bubble. We recently surveyed our daily newsletter readers, which showed that 44% are leaning bullish, compared to 48% last month, which was a pandemic high. Meanwhile, 63% say we are still ‘in a bubble’, and 59% say the stock market is ‘overvalued’.

That is not prompting the majority of our readers to make meaningful changes to their portfolios, however. Only about one third (34%) of our readers are making more frequent changes to their portfolios, and 24% say they are investing even more money.

While most may not be making meaningful changes to their portfolios or strategy, their anxiety is rising. The Investopedia Anxiety Index, our proprietary measure of reader interest in fear-based terms around the markets and the economy, is at a three-month high.

It is nowhere near the levels we saw in March and April of 2020, but reader interest in terms like short-selling, naked shorting and trading halt spiked in the past week. The wild trading in ‘meme stocks’, has contributed to the anxiety as investors and traders try to understand what is driving their prices to extremes.

Despite a recent drop in prices, our readers still feel like the biggest bubble is in cryptocurrencies. Bitcoin and Dogecoin top their list, with 41% and 39% selecting those tokens as the most frothy, respectively. U.S. residential real estate is third on their list at 35%, followed by U.S. equities at 30%. We began our survey on June 3, after Dogecoin tumbled 37% from its recent high, and Bitcoin fell 40%. Both tokens have fallen another 10% since then. U.S. house prices, on the other hand, keep rising.

Furthermore, 1 in 5 (18%) say they’re actually investing more in cryptocurrencies due to recent market events, and Ethereum has emerged as a popular choice, with 17% of our readers saying they own it.

Exxon, Ford Edge Out Past Reader-Favorite Tesla in Top 10 Stocks

As for stocks, Investopedia readers have been fairly consistent all year. Our readers, who range in age from 18-80, most of whom have portfolios of $100,000 or more, have always favored blue chips and big tech. Apple(AAPL) and Microsoft(MSFT) are their top holdings, much like a lot of index funds and ETFs. But in the past six weeks, many have taken a liking to Exxon-Mobil and Ford, both of which have notched huge gains in 2021, rising 78% and 51% respectively. Tesla, which was a reader favorite for the past year, was notably absent from our readers top ten portfolio holdings, as was Nvidia(NVDA) and JPMorgan Chase.

As for future investments, our readers are sticking with stocks. 61% say they will buy individual stocks, ETFs or index funds in the next three months. Only 8% say they intend to buy more cryptocurrency, and only 1% say they will buy SPACs. 

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