Key Takeaways
- 64% of retail investors describe themselves as rational and 20% as emotional investors, yet 48% overall made a FOMO purchase in the past 12 months.
- 42% of retail investors admit they lost money due to emotional trading decisions in the past 12 months, averaging $1,606 in losses.
- 40% of retail investors have consulted an AI tool during a FOMO or fear-driven moment. Among them, 34% followed the AI’s advice and made money, while 12% did so and lost money.
- 25% of retail investors have panic-sold investments during a geopolitical event such as a war, election, or major breaking news, only to watch the market recover within weeks.
Emotions and AI Tools Impacting Investor Decisions
Fear, hype, and uncertainty are pushing investors to make choices they may not have planned to make. Many are also turning to AI for reassurance, guidance, or a second opinion in high-stress moments.
- Only 20% of retail investors describe themselves as emotional investors, yet 31% admit they trade emotionally at least some of the time, and 48% made a FOMO-driven purchase in the past 12 months by buying an asset hitting all-time highs.
- 42% of investors say they lost money to emotional trading decisions in the past 12 months, losing an average of $1,606.
- 58% of investors have used an AI tool for investment decisions. Emotional investors (75%) are more likely than rational investors (54%) to have done so.
- 40% of investors have consulted an AI tool during a FOMO or fear-driven moment, and among them, 34% followed the AI’s advice and made money. Another 12% acted on the AI advice and lost money.
Generational Investor Findings
- Gen Z is the most emotional generation of investors, with 26% self-identifying as such. Fewer millennials (19%), Gen X (19%), and baby boomers (13%) say the same.
- Have traded emotionally: Gen Z (41%), millennials (30%), Gen X (30%), and baby boomers (23%)
- Made a FOMO purchase in the past 12 months: Gen Z (63%), millennials (51%), Gen X (41%), and baby boomers (20%)
- Used AI for investment decisions: Gen Z (64%), millennials (60%), Gen X (57%), and baby boomers (41%)
Emotional vs. Rational Investor Behaviors
The differences between emotional and rational investors show up quickly in their trading habits and media consumption. From Reddit to financial advisors, the sources investors trust often influence how they respond when markets move fast.
- No matter how far their overall portfolios dropped, 43% of investors say they would never sell their investments. The remaining investors surveyed would sell at these drops:
- 5% drop: 3% of investors
- 10% drop: 16% of investors
- 20% drop: 17% of investors
- More than 20% drop: 21% of investors
- 52% of retail investors have followed a financial influencer. Among them, 34% lost money, and 18% made money.
- 30% of investors have placed a buy or sell trade within 24 hours of seeing related content on social media.
- Top sources self-identified emotional investors use to inform their buy or sell decisions:
- Reddit: 42%
- Financial news outlets: 40%
- YouTube: 38%
- Investment app research/built-in tools: 38%
- Top sources rational investors use to inform their buy or sell decisions:
- Financial news outlets: 46%
- Investment app research/built-in tools: 44%
- Reddit: 36%
- Who investors trust most when making investment decisions:
- Certified financial advisors: 66%
- Traditional financial news media: 47%
- AI tools: 28%
- Financial influencers on social media: 13%
Methodology
We surveyed 1,002 U.S. retail investors about their emotional trading habits, the dollar amounts they have lost from emotional trades, the information sources they rely on, and how AI tools factor into their investment decisions. Respondents represented a mix of experience levels, portfolio sizes, and generations. The generational breakdown was 52% millennials, 26% Gen X, 14% Gen Z, and 8% baby boomers. Data was collected in May 2026.
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