Small Investors’ Favorite Stocks Are In Freefall

Small Investors’ Favorite Stocks Are In Freefall
Andrew Rummer

about 2 years ago1 min

Mentioned in story

If your investment account makes for distressing viewing at the moment, you’re far from the only one.

The chart above shows how Goldman Sachs’s index of the most popular stocks among retail investors (in blue) has plummeted since the start of the year. $100 invested in that index as markets bottomed in March 2020 would be worth $212 today, down from a high of $305 in November. The pink line shows how the same sum invested in the MSCI All-Country World Index of global stocks would be worth $186, following a much more sedate ride. 

You can also see from the chart what a great time smaller investors were having in the final months of 2020 and into the early part of 2021. Since euphoria peaked in January 2021 with the GameStop short-squeeze, retail traders’ top picks have either trended sideways or lower. 

Unfortunately, the chart also suggests that retail investors’ favorite stocks may have further to decline before they finally fall back into line with the wider market. 

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