Individual investors kicked off 2021 with the pace of sprinters. Now they finally showed signs of fatigue.
After a sensation this year, the trading activity of non-professional investors has slowed in recent weeks, and the group has invested less in all investments from US stocks to call options. The average daily transaction volume of at least two online brokers has dropped slightly from the 2021 high. Across the industry, the number of visits to brokerage sites and the time spent on these sites has decreased.
The decline in enthusiasm marked a sharp reversal a few months ago, when the frenetic activity of individual investors took center stage in financial markets. As the stock price of “meme stocks” soared in January, millions of small investors poured in, pushing the already strong retail investment trend into an over-driven state. In a frenzy that market observers have never seen before, retail investors made stocks such as GameStop Corp. soar, pushing the brokerage platform to the top of the app store rankings. The trading volume has soared to the point that many brokers struggle to keep the platform running smoothly.
Individual investors and analysts said that the factors driving the recent downturn are a series of factors, including concerns about the volatility of growth stocks. In growth stocks, small investors tend to invest heavily. Since February 1
Viraj Patel, global macro strategist at Vanda Research, said: “Like any investor, you will not add new funds in a market where there is no clear catalyst to push stocks up by 5% to 10%.” In the past two weeks, retail investors have entered a dormant state.”