The most popular financial products for first-time investors

The most popular financial products for first-time investors

With inflation rising at its fastest rate in 30 years and the cost of living constantly rising, more and more people are turning to investments to protect the value of their wealth. Luckily, investing has now become more accessible than ever thanks to online broker reviews, making it easier to find the safest place to trade or keep your assets. 

But which are the most popular financial products among investors? We’ve surveyed our customers to find out, breaking this down by level of expertise and comparing data year-on-year to spot changes in the interests of investors.

1. Stocks - 41.7% of investors 

Taking the top spot as the most popular financial product according to our data is stocks, with the majority of investors agreeing that they are a must-have. Stocks have historically outperformed other types of investments in terms of profit in the long term, making them the most popular option for beginner and expert investors alike. 

2. Forex - 14.1% of investors

The second most popular product for investors is Forex, the largest financial market in the world, with more than 106,000 investors considering it a must-have. Forex is one of the most accessible financial products available, as currency markets are open 24 hours a day. Forex also gives investors plenty of opportunities to profit from coin pairs, and diversifying portfolios with currency can help hedge against risk from interest rates. 

3. Options - 12.8% of investors

Next up are options, the financial contract that gives investors the right to buy or sell, depending on the contract, a specific asset on or before a certain date. 12.8% of investors consider options essential in a financial portfolio as they are a powerful tool that can add income, increase leverage and protect your wealth against a declining stock market.

The most popular financial products for first-time investors
Financial products dropping the most in popularity

1. Forex - 6.2% average decrease 2019-2021

Forex, the market for trading currencies against each other has lost the most interest from first-time traders between the two years. The product has decreased in popularity by an average of 6.2%. 

2. CFDs - 2.6% average decrease 2019-2021

The popularity of CFDs, or contracts for differences, is also declining amongst first-time investors. CFDs are contracts between investors and brokers stipulating the buyer pays the seller the difference in the value of an asset when the contract has ended. This creates revenue from the rise in the value of an asset. 

CFDs are considered an advanced trading product and are mainly used by experienced investors so it's not surprising their popularity dropped by over a quarter between 2020 and 2021 for first-time investors.

3. Options - 1.1% average decrease 2019-2021

Options have also seen an average decrease in popularity among first-time investors between 2019 and 2021, decreasing by just over 20% between 2020 and 2021 alone. These contracts agree to buy or sell assets at an agreed-on price in the future, generating profit for buyers if an asset’s value rises or falls depending on the type of option bought.   

The most popular financial products for first-time investors
Financial products rising the most in popularity

1. Cryptocurrency - 22% average increase 2019-2021

Cryptocurrency has gained the most popularity since 2019, with an average increase of 22%. These virtual currencies are based on blockchain technology and exist outside of government regulation. First-time investors are drawn to crypto for its potential as a lucrative asset due to its volatility and resulting potential to make big returns on investment.

2. Funds - 1.5% average increase 2019-2021

In second place are funds, rising in popularity by an average of 1.5% between 2019 and 2021. These are pools of collective capital used to buy financial assets at a lower cost and offer a broader range of opportunities than individual investors might get on their own. 

3. Stocks - 0.7% average increase 2019-2021

Stocks saw a marginal average increase in popularity between 2019 and 2021, rising by 0.7% over this time. The potential of stocks to earn big rewards still attracts investors, as this product increased in popularity between 2019 and 2020 by 20.3%, although interest dropped dramatically between 2020 and 2021.

1. Stocks - 44.3% of new investors

Stocks are the most popular product among new investors, with just under 44.26% considering this financial product a must-have. Investing in stocks is appealing to first-timers as the market is highly accessible, with many brokers offering fractional shares meaning you can begin investing for very little money.

2. Forex - 15.1% of new investors

Forex takes second place as a must-have product among first-time investors, with 15% considering it essential for a portfolio. Like stocks, forex is one of the more accessible financial products for newcomers and can provide quick gains which can be easily converted into ready cash thanks to its high liquidity.    

3. Options - 11.3% of new investors

Options come next as a popular product for first-timers, with just over 10% agreeing that this product is a must-have. These financial derivatives are more complex than stocks or forex and traders need to understand advanced trading strategies, making them a less popular choice for new traders.

The most popular financial products for first-time investors
The countries with the most interest in financial products

The countries with the most interest in financial products

First-time investors in India, South Africa and Japan all rank in the top 10 for regarding these products as essential investments in all of the financial products we looked at.

India takes the top spot for five of the six products, losing out to South Africa for first-timers considering cryptocurrency a must-have. India still takes second place for cryptocurrency, with slightly under half of its first-time investors considering crypto a must-have. 60% of first-time investors in India consider stocks the most important financial asset.

South Africa also features in every category, ranking first for first-timers interested in cryptocurrencies. This is no surprise as South Africa is a hotbed for the digital currency market, thanks to its ability to store wealth against the country’s more volatile fiat currency, the South African Rand. It also takes second place for stocks and forex, with 48% and 42% of first-time investors considering these a must-have investment.

Japan also appears in the top 10 for all 6 products, with first-time investors placing in the top five for every category. Japan ranks second for both options and funds, or collective investment in a number of assets managed by dedicated professionals for a fee.

The most popular financial products for first-time investors
Methodology

We wanted to analyse the most popular financial products of 2021, as well as changes in their popularity between 2020 and 2021. The data was broken down by expert level to find the most popular products among first-time investors overall and by country.

To analyse the most popular financial products we used internal data about our customers using BrokerChooser's matching tool. We collected data between January 2019 and March 2022.

Customers gave answers about which is the most important product they would like to invest in or trade with.

Author of this article

Ádám Nasli

Author of this article

Ádám worked in banking and investment, and holds a professional degree in this field. He is a motivated finance expert, having joined BrokerChooser in 2018. He's also eager to help people find the best investment provider for them, and to make the investment sector as transparent as possible. In his spare time, he loves learning new things, especially data science, algo-trading, programming and trading.

Ádám Nasli

Analyst head

Ádám worked in banking and investment, and holds a professional degree in this field. He is a motivated finance expert, having joined BrokerChooser in 2018. He's also eager to help people find the best investment provider for them, and to make the investment sector as transparent as possible. In his spare time, he loves learning new things, especially data science, algo-trading, programming and trading.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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