The 3 Biggest Bull Market Threats, According to 2,000 Individual Investors
Given the rise of online investing and commission-free trading, institutional money is no longer the only major player in the market. Retail investors have become a force to be reckoned with. Many investors of all types now monitor sentiment among the retail crowd, which often trades very differently than institutions. Retail investors tend to invest for the long term and are more likely to buy the dip during a big sell-off.
According to the Motley Fool’s 2026 Investor Outlook and Predictions Report, which surveyed 2,000 individual investors about a range of stock market topics, 58% of individual investors plan to buy more stocks in 2026, while 34% plan to hold stocks. Gen-Z and millennial investors are the leaders in these segments.
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That said, individual investors do not ignore the risks prevalent in today’s environment. Here are the three biggest risks facing the bull market right now, according to the latest Motley Fool research.
Topping the list of investor concerns were the risks of recession and inflation, with 45% of respondents citing them as the biggest concern for the bull market.
This is not a big surprise, either, since investors are facing this concern since the pandemic. When the Federal Reserve raised interest rates by more than 500 basis points (5%) between 2022 and 2023, investors believed that a recession was inevitable. Interest rates increase the cost of borrowing, which often has a negative impact on the economy.
Rapidly rising interest rates also led to the longest inverted yield curve in history, meaning yields on some short-dated US Treasury bills and bonds were higher than their long-dated counterparts. This has been a reliable indicator of recession for decades. Now, the US economy is far from out of the woods, and the latest economic data suggests that a recession may still be on the table.
Few economic topics in recent years have been discussed more than inflation. In 2022, the Consumer Price Index, which measures the prices of a basket of consumer goods and services, rose to 9%, kicking off the Fed’s rate hike campaign. Since then, inflation has slowed significantly, but remains above the Fed’s preferred target of 2%.
Last year’s government shutdown and President Donald Trump’s tax cuts have made it difficult for economists to determine where inflation really is and whether it’s still headed for 2%. If inflation continues to be high and the unemployment rate rises, the economy may find itself in deflation, an economic situation that is very difficult to escape.
