Connect with us

The True Herald


Economy

Individual Investors Retreat from Markets After Show-Stopping Start to 2021 – The Wall Street Journal

Spread the love

https://www.wsj.com/articles/individual-investors-retreat-from-markets-after-show-stopping-start-to-2021-11617528781

Spread the love

Individual investors kicked off 2021 at a sprinter’s pace. Now, they are finally showing signs of fatigue.

Trading activity among nonprofessional investors has slowed in recent weeks after a blockbuster start to the year, with the group plowing less money into everything from U.S. stocks to bullish call options. Daily average trades for at least two online brokerages have edged down from their 2021 highs. And across the industry, traffic to brokerage websites, as well as the amount of time spent on them, has fallen.

The decline in enthusiasm marks a sharp reversal from just a few months ago, when individual investors’ frenetic activity took center stage in financial markets. As shares of “meme stocks” soared in January, millions of small investors piled in, kicking an already robust retail-investing trend into overdrive. In a mania unlike anything market observers had ever seen, individual investors sent stocks like GameStop Corp. soaring, pushing brokerage platforms to the top of app-store rankings. Trading volume surged so much that many brokerages struggled to keep their platforms smoothly running.

Support Our News Campaign

Shop our Store

Click Here To Shop

Driving the recent pullback, individual investors and analysts say, is a series of factors, including concerns about the volatility among growth stocks—a group in which small investors tend to be heavily invested. Since Feb. 12, when the technology-heavy Nasdaq Composite hit its most recent record, individual-investor favorites including Tesla Inc., NIO Inc. and Apple Inc. have each fallen more than 9%.

“Like any investor, you’re not going to add fresh money to a market that doesn’t have a clear catalyst to drive stocks 5% to 10% higher,” said Viraj Patel, global macro strategist at Vanda Research. “Retail investors have gone into hibernation in the past couple weeks.”

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top Stories

Trending Stories

To Top