Investors display increased risk appetite amid geopolitical uncertainties

Goldman Sachs Research analysts have observed a surprising phenomenon: despite the intensification of global geopolitical tensions, investors’ risk appetite is increasing significantly. This trend has emerged over the past few months, marking a shift in market psychology. How can investors increase their risk exposure in such an uncertain environment?

Rising Debt: A Signal of Aggressive Appetite

Data reveals a dramatic increase in margin account leverage since mid-2025, reaching record levels not seen since 2021. This appetite for amplified gains reflects heightened investor confidence in their strategies. Leverage, a classic tool for magnifying returns, is becoming popular again precisely when systemic risks should encourage caution. This paradox suggests that investors are evaluating the current landscape differently.

Portfolio Recomposition and Market Expectations

Beyond margin accounts, investors are massively diversifying their allocations outside the Big Seven U.S. tech giants. This shift toward other sectors and regions indicates a search for additional returns. Simultaneously, a notable trend is emerging: short positions on the VIX volatility index are reaching a decade-high. The ratio of short to long positions on the VIX is at a ten-year maximum, signaling a widespread market belief that volatility will soon contract.

What This Market Appetite Tells Us

The risk appetite displayed by investors paints a picture of a class of actors betting on a rapid normalization despite looming clouds. Data collected by ChainCatcher on these Goldman Sachs developments indicate that the market anticipates a resolution of tensions or an insufficient risk premium to deter investors. This appetite reflects less certainty and more a wave of optimism potentially preceding a correction in expectations.