Not afraid of the U.S. stock market crash, retail investors are increasing their positions against the trend! Tesla and NVIDIA become popular for bottom-fishing
In response to the market correction in the U.S. stock market triggered by Trump's tariffs, retail investors injected $7.3 billion into the stock market this week, purchasing over $4 billion in Tesla stocks since last Tuesday. This indicates that the market may not have hit bottom yet, as retail investors are often the last to exit the market
In the face of the stock market correction triggered by Trump's tariffs, retail investors continue to hold onto their beliefs.
According to a report by Bloomberg on the 14th, in the week ending this Wednesday, retail investors injected $7.3 billion into the stock market, even as the S&P 500 index fell more than 4%, with tech stocks experiencing even larger declines, they did not stop buying.
Under the strategy of "buying on dips," stocks like Tesla and NVIDIA have become favorites among retail investors. In particular, since last Tuesday, retail investors have purchased over $4 billion in Tesla stock, despite the fact that Tesla's stock price has already dropped nearly 20% since early March.
Retail Investors Increase Positions Against the Trend, Betting on Market Rebound
In addition to directly buying individual stocks, retail investors have also heavily invested in leveraged ETFs, further amplifying their investment risks.
Bloomberg data shows that leveraged ETFs like ProShares UltraPro QQQ (TQQQ) and Direxion Daily Semiconductors (SOXL) received over $1 billion in inflows last week. The ARK Innovation ETF (ARKK), managed by "Cathie Wood," was also in demand, with its leveraged version, Tradr 2X Long Innovation ETF (TARK), experiencing the largest inflow since 2022.
Bloomberg analysts pointed out that last week, ETFs offering three times the returns of their benchmark indices or ETFs attracted $2.7 billion in new funds, primarily concentrated in distressed or high-growth indices or sectors.
Notably, South Korean retail investors showed strong enthusiasm for "bottom fishing." Bloomberg cited data from South Korean deposits, indicating that from March 10 to 13, South Korean retail investors net purchased a total of $519 million in three U.S. leveraged ETFs. Meanwhile, they also directly invested $371 million in Tesla stock.
The retail investors' "buying on dips" strategy has proven effective over the past 15 years, leading them to develop a habit of "buying on declines." However, this "counter-trend" behavior among retail investors may not be a positive signal. JPMorgan's Emma Wu noted that this investment behavior reflects the confidence built since the global financial crisis, during which the U.S. stock market has often risen year after year.
However, veteran strategist Jim Paulsen stated that the amount of stock held by retail investors exceeds their cash positions by 50%, which is more than twice the level of S&P 500 index corrections during non-bear markets since 1988. This suggests that the market may not have hit bottom yet, as retail investors are often the last to exit the market.