Bret Kenwell, U.S. investment and options analyst at eToro, joins Remy Blaire to discuss retail investors’ global diversification push, record equity resilience amid cross-asset volatility, and why younger traders continue buying market dips in 2026.
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Remy: In the final quarter of 2025, and so far in Q1 2026, we've seen metals rally while crypto sells off. We've also seen market rotation into small caps and energy and away from tech giants. AI trade uncertainty has reemerged, hitting software names as well as wealth management and also real estate services as well. Now, retail traders wisely bought the dip, while tech sold off in April of last year, and eToro's latest quarterly report showcases some more of their discipline as well as diversification. One trend from Q4 2024 to 2025, retail traders are looking overseas and investing in foreign bonds and equities. Well joining me this morning is Bret Kenwell, U.S. investment and options analyst at eToro. Bret, good morning. Thank you so much for joining me.
Bret: Yeah always an honor to come down here.
Remy: Well first and foremost 2026 has been off to quite a volatile start. And you and I were remarking how we continue to see new record and intraday highs for U.S. equities. But the same also goes for foreign indexes as well when we're talking about equities. So what do you make of how we're kicking off this year?
Bret: Yeah it's been it's been an interesting start to the year to see the volatility in metals, the selloff in crypto and yet general stability in the indices in the US indices, the foreign indices. I think it just kind of speaks to this vicious, vicious rotation we've been seeing not only across asset classes but within the sectors themselves of the market.
Remy: And I think diversification is something that all investors are keeping their eyes on this year given all that volatility. But I think the survey from eToro was interesting. When you do a breakdown of the demand for foreign bonds as well as foreign equities. So what is going on here?
Bret: Yeah, the diversification strategy for retail investors is really interesting. As you mentioned, we're seeing them spread across foreign equities foreign bonds even domestic bonds alternative assets like real estate. really cryptocurrencies and commodities have been the two spots that they've most consistently rotated through. There are only two categories we saw back to back annual increases in, and we continue to see that rotation play out. Um, you know, right now it's a little bit more of a pain game with how poorly crypto's done lately. And in while metals are up it's been very volatile. But when you step back and think about them, retail investors increasing their allocations for the last couple of years, you know you still look at pretty big gains in both of those groups. So it's it's sometimes diversification is a little bit of pain. Sometimes it's a bit of a gain So it's it's just kind of a balance.
Remy: Yeah. And we're only into the second month of this year. And we've seen volatility across crypto and of course precious metals. And it's not just gold but it's also other metals both the precious as well as industrials. So do you expect more of the same. And what are you seeing when it comes to retail investors and demographics.
Bret: Yeah it's interesting on the demographic side of retail we see younger investors really engaged in the market. Um, 90% of millennials and Gen Z are investing in the market every month. So a very consistent group. Overall retail investors had 80% were investing every month. So it is a consistent engagement with the market. They are looking for opportunities. They are buying the dips. They're spreading their money across various asset classes. At times that's going to be crypto. At times it will probably lean more heavily to stocks or to gold or metals. But largely speaking, this is a group that remains engaged, as you mentioned at the top. They really bought that dip last April, and I think they will continue to buy the deeper dips.
Remy: Yeah. And speaking of which, one area that I do want to get your take on is the FX market in particular the US currency. So given the weakness in the US dollar, how is this affecting retail investors out there?
Bret: The weakness in the dollar is given that given a surprising amount of attention from retail, I actually thought that they wouldn't put so much emphasis on on the currency side of things. But going back to a survey we did actually a few months ago, a few quarters ago in the summer, um, cryptocurrencies and gold were the two asset classes that they were gravitating to in lieu of a weak dollar. So I think those two. I don't know if it's maybe the fixed supply of Bitcoin, maybe the defense ability of gold that's attracting them away from or attracting them to them in light of a weaker dollar But that's where they keep going. I imagine that's where they'll keep going if the dollar remains weak.
Remy: Yeah. And Bret, we're hearing the first trade bell here, given that we have an IPO here at the New York Stock Exchange. But as we look forward to the rest of this year. Tell me a little bit about the report and how retail investors actually outperformed institutions last year. Why is this happening?
Bret: Yeah, it's really interesting. And I think if we go back to last April when we were at the bottom of the tariff sell off, we're S&P had lost about 20% retail investors, and speaking of eToro platform data specifically, they were layering in those first few days of April and some of the highest by volume we had seen. And I think that speaks broadly of retail. They buy those dips, whether that was during the Covid selloff, the 2022 bear market or most recently, the April selloff. Retail likes those deep dips. They step in and buy, and they continued to buy all the way through May. And that helps set them up for outperformance against the institutions last year. Um, you know, if we see more volatility this year, I suspect they will also buy that dip.
Remy: Yeah. And before I let you go, I do want to ask you about the outlook for 2026. So here we are at the beginning of the year. We've been getting mixed data points right. Whether we're talking about the non-farm payrolls or other indicators of the labor market as well as inflation. And this does affect the outlook for the central banks. So given the politics as well as expectations for the economy, what do you expect to see this year?
Bret: Sure, there's a lot of moving parts this year, whether it's actually in the asset classes or the sectors or even just the talk with the fat and the new chairman coming in in a couple of months. there's a lot of moving parts. But to me my focus is going to stay on the labor market if we do see stability there. And, um, you know, with some of the soft reports we've had over the last few months, if we start to see that ease and we start to see jobs gains again, I think that will speak positively for the market overall and broadly for the economy. So that's kind of where my focus will be.
Remy: Yeah. And for Americans out there who are wondering when prices could actually come down, when we're talking about their daily spending, what would you say to them? And what about borrowing costs as well?
Bret: Yeah. When inflation overall we have seen it mellow out. But there's I think this idea that we're going to see prices go back to the way things were or go back down to a level. You know, it's so weird to think about before Covid now that it's been six years. Um, you know, it's going to be hard to see prices go down. But at least I think for American spenders, a win would be just to see prices stable and steady and earnings, uh, earnings continue to accelerate. Our average hourly earnings accelerate.
Remy: Yeah. And tomorrow morning we will be getting that CPI. Read the delayed report. Given that partial government shutdown we had last week. But a lot to keep our eyes on though. Thank you so much for weighing in. And as always, great to have you here.
Bret: Of course. Thank you.
Remy: Thank you so much.