Retail Investors Are Finally Ditching Stocks

Retail Investors Are Finally Ditching Stocks
Carl Hazeley

over 1 year ago1 min

Mentioned in story

Source: Bloomberg, JPMorgan

Retail investors – who’ve bought almost every dip in the past three years – ditched their shares in the past week at the fastest pace since September 2020, according to an estimate by JPMorgan Chase. You can see this play out in the chart above, which shows that retail investors sold more stocks (in billions of dollars) than they bought last week. That’s a notable shift, given that they’ve mostly held onto them throughout this year’s $15 trillion selloff.

It was perhaps just a matter of time: retail demand as tracked by JPMorgan has been below its one-year average for the past two months, while retail investors in the options market have been favoring puts (the right to sell stocks) over the calls (the right to buy) that were popular last year.

Still, the night is darkest before dawn: retail investors do most of their buying when prices are high and the least when prices are low, at least according to some professional investors. So those pros will see this so-called “weekly imbalance” as a sign that the selloff is near an end, which could encourage them to start buying stocks all over again.



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