{"id":12410,"date":"2023-04-27T18:39:55","date_gmt":"2023-04-27T18:39:55","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=12410"},"modified":"2023-04-27T18:39:56","modified_gmt":"2023-04-27T18:39:56","slug":"are-individual-investors-bullish-on-stocks-again","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/are-individual-investors-bullish-on-stocks-again\/","title":{"rendered":"Are Individual Investors Bullish on Stocks Again?"},"content":{"rendered":"\n<p><em>Jimmy H. from Jackson, MS asks: <\/em>Hello Mitch, I\u2019ve been tracking some data about individual investors pouring money back into the stock market, via ETFs and individual stocks. Do you see this trend as a bullish signal?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing. By many measures, individual investors have been enthusiastic about equity markets for years now \u2013 basically since the stimulus checks arrived in 2020.<\/p>\n\n\n\n<p>Just using Q1 as an example, from 2017 to 2019 individual investors bought an average of about $15 billion or so in stocks and ETFs in the first three months of those years. In Q1 2021 and 2022, the number soared to $80 billion, as fiscal stimulus money was sent directly to households. Stimulus checks and related savings are largely gone, but investors have hardly wavered from staying active in equity markets. In Q1 2023, there were $77.7 billion in net purchases of stocks and ETFs. Earlier this week, Charles Schwab reported that customers opened over a million new brokerage accounts with $132 billion in new assets.<\/p>\n\n\n\n<p><a href=\"https:\/\/go.steadyinvestor.com\/arrow-retirement-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_retirement_guide_zim_04_27_2023&amp;content=retirement_guide\"><strong><u>Looking for a Guide to Planning an Easy Retirement?<\/u><\/strong><br><\/a>\u00a0<br>In our exclusive guide, <em>Retirement Made Easy<sup>2<\/sup><\/em>, investors can get insight on how to create a long-term financial plan that helps generate stable income and minimize risk. The guide will also answer critical questions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How much should you be saving?<\/li>\n\n\n\n<li>What is the best long-term approach?<\/li>\n\n\n\n<li>How do you hire the right money manager?<\/li>\n\n\n\n<li>And more\u2026<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about retirement planning, click on the link below to get your free guide today!<br>\u00a0<br><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-retirement-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_retirement_guide_zim_04_27_2023&amp;content=retirement_guide\">Download Your Copy of \u201cRetirement Made Easy\u201d Today!<sup>2<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>Your question is whether this trend is a bullish signal, but I\u2019d hesitate to read that deeply into it. After all, individual investors have been pouring money into equities and ETFs for years now, and 2022 was a bear market basically from start to finish.<\/p>\n\n\n\n<p>I do think there is some useful information to parse from this data, however. One point that I\u2019d note is that options trading has declined meaningfully over the past couple of years, which to me is a signal that investors are growing more thoughtful about risk levels within portfolios. Options trading made up about 18% of the overall market in July 2020, a figure that dropped to 12% at the end of Q1 2023. Investors in Q1 were also net buyers of ETFs and net sellers of individual stocks, which may be a shift to emphasizing diversification over concentrated portfolios.<\/p>\n\n\n\n<p>Generally speaking, I view the growing numbers of individual investors and robust purchasing activity in equity markets as a positive. The stock market has historically been one of the best wealth generators available for long-term investors, and the more people who invest as a means to grow wealth over time, the better.<\/p>\n\n\n\n<p>What concerns me about some of the trends listed above is that individual investors tend to want to generate outsized returns quickly, which leads to risky behavior. That means many inexperienced investors are engaging in day trading, options trading, and other strategies for which they have no track record. Research tells us again and again that the average investor tends to underperform the broad equity markets over time, and it\u2019s for this reason.<\/p>\n\n\n\n<p>With that being said, investors, especially those looking to retire soon, are probably wondering what the best option is for their portfolio.<\/p>\n\n\n\n<p>Well, even in a volatile market, I recommend that investors focus on factors that contribute to a well-diversified, low-risk retirement portfolio. Our exclusive <em><a href=\"https:\/\/go.steadyinvestor.com\/arrow-retirement-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_retirement_guide_zim_04_27_2023&amp;content=retirement_guide\"><strong>Retirement Made Easy Guide<\/strong><\/a><\/em><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-retirement-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_retirement_guide_zim_04_27_2023&amp;content=retirement_guide\"><strong>3<\/strong><\/a><\/sup> can help you reach your goals!<\/p>\n\n\n\n<p>It also provides answers to critical questions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What is the best long-term approach?<\/li>\n\n\n\n<li>How do you manage your retirement income for taxes?<\/li>\n\n\n\n<li>How much should you be saving?<\/li>\n\n\n\n<li>And more\u2026<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about retirement planning, click on the link below to get your free guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In Q1 2023, investors made $77.7 billion in net purchases of stocks and ETFs\u2014but does indicate bullish sentiment? <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-12410","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=12410"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12410\/revisions"}],"predecessor-version":[{"id":12412,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12410\/revisions\/12412"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=12410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=12410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=12410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}