Retail Traders Continues to Buy the Dip, Not a Good Sign?
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Data shows the recent market correction hasn't scared off retail investors, Equity Inflows Every Day of January. Retail investors are "buying the dip" in U.S. stocks.
Vanda Research said on Wednesday: Retail investors have bought stocks every day in 2022, while more experienced retail investors who are feeling the sting of losses have pulled back.
Vanda Research pointed that daily inflows have been above the 2021 average in all but two of the days in January.
These inflows come at a time when markets have been getting crushed. Through yesterday, the S&P 500 was down 9.3% so far this year, while the tech-heavy Nasdaq Composite Index had fallen 14.5%.
According to data from Bloomberg Intelligence: Retail investors are a small part of the market. In the past few quarters, they've made up about 20% to 25% of all equity volume, So they won't have a massive impact on day-to-day market moves.
Data on new brokerage accounts released by Charles Schwab shows monthly growth rose to 233,000 in December from an average of 133,000 from June to October. “The correction in January has probably attracted an even larger pool of investors that were waiting for an opportunity to join,” said Vanda.
Retail traders are still snapping up shares in 2022, following a trend that started during the pandemic in 2020. Is this a good sighn?
Stansberry Research Analyst Nick Koziol commented: " We like to look at retail trading data from a contrarian point of view. When retail investors are overly bullish, we get cautious. And when they're bearish, that's usually the time to buy in. Right now, it looks like retail investors are still bullish – as seen in their buy the dip mentality this month. That could be a reason to be cautious on U.S. stocks in the near term."
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- Boo2020·2022-02-08Ideally it's always better to buy the dip, the best time to time will be when u felt the most painful moment that u refuse to look at ur portfolio coz it is in deep red sea.3Report
- koolgal·2022-02-08Saavy Investors love to buy the dip especially quality shares like Apple & Microsoft because they will hit jackpot in long run on exponential growth of these stocks.Cash gets eaten up by inflation!2Report
- Zarkness·2022-02-03retailer inflow is positive when institutional is also inflow. Instiutional is outflow while retailer inflow is negative. When both also outflow is very negative.1Report
- Hyyol·2022-02-03retail traders feeling brave after surviving covid1Report
- Dee Kit·2022-02-02Buy the dip because some stocks are deeply undervalued!1Report
- Francislch·2022-02-02With more countries opening up and hopefully the economy will improve, many investors are betting on the bull. Hope they are right and things continue to improve with Covid-19 being less deadly. 🚀🚀1Report
- Maky·2022-02-05Buy the dip on stocks with potential for growth. Some good stocks have attractive and low PE so can buy. Buy the dip wisely as our funds are limited. Not anyhow.LikeReport
- SG 88·2022-02-05interestingly put it. like the pro investor say, be cautious when everyone is greedy, be greedy when others are cautious😉1Report
- Lowses·2022-02-05Despite te dip, I think most growth company valuation is still on the high side. Maybe retail investors dont see any weakness in the economy that instituition do?LikeReport
- Simplehuman·2022-02-05seems challenging to navigate the market which is driven by retail behavior, contrary to economic factors1Report
- yinrudy·2022-02-03buy the stock that business fundamental is solid for future during this period of uncertainty2Report
- Rjn828·2022-02-02Buying a dip stocks is depending on its value propositio in short term versus long term outlook. And what is the appetite of the investor to gain. Longetivity of growth or Amplified of Dividend.LikeReport
- koolgal·2022-02-02There is no alternative but to invest in the stock markets as inflation is at all time high. Buy the dip is excellent strategy but hold long term is better especially stocks like Apple, Microsoft! 🎊LikeReport
- Kingcat·2022-02-12thank u! [Like]LikeReport
- StayHome·2022-02-09Thank you @MillionaireTiger . You must hv been busy giving “Ang Bao” during this CNY ! [USD][Strong][Bless]LikeReport
- yong168·2022-02-08疫情还在蔓延....旅游受到影响和限制，不如投一些些🤏💰到股市，逢低买入，涨了赚了，疫情缓了，才... [你懂的]LikeReport
- kiattt·2022-02-05buy the dip of the dip of the dip2Report
- ATM228·2022-02-04Buy the Dip... Never wrong3Report
- Bulltrader·2022-02-04buy dip. mkt factor in ratè hike2Report