JPMorgan says young and old individual investors have been buying up stocks this year, but it's the latter that's likely to provide support later this year.
While data shows individual investors dusting themselves off and moving back into the stock market this year, alas their love for Wall Street is uneven.
That’s according to Vanda Research, which points out that while retail investor inflows into U.S. stocks are at levels last seen in 2020-21, the move has has been dominated by Tesla Inc. TSLA , whose shares saw their worst-ever performance in 2022, and stocks exposed to a hot new technology. That said, the analysts see fear of missing out and momentum driving flows, making the situation different from early 2021 and leaving individual investors “susceptible to negative catalysts.”
JPMorgan reported last month that retail market orders as a percent of market value reached 23% on Jan. 23, which compares the 22% seen a few times back when GameStop shares GME started soaring and Roaring Kitty and Reddit Wall Street Bets was the talk of the watercooler in early 2021. In the meantime, hopes for a soft landing and not-too-hot, not-too-cold economy is likely to keep the money flowing. That lines up with insights from JPMorgan, who noted significant participation lately by older investors, who will likely keep buying stocks and bonds unless optimism over inflation fades.
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