Has the "lying down to win" era of the US stock market come to an end? A large number of retail investors are fleeing under Trump's impact

The chaotic economic policies of the Trump administration have triggered market turmoil, with the S&P 500 index down 8.2% since hitting a record high in February. Retail investors are beginning to question the strategy of holding U.S. stocks for the long term, with analysts suggesting that the years-long era of "lying flat" in U.S. stocks may have come to an end.

Currently, retail investors are showing signs of "running away." As panic spreads, retail investors are frantically reallocating their portfolios, shifting from U.S. stocks to safe-haven assets such as money market funds, short-term bonds, gold, and European defense stocks.

Recent trading activity in pension funds reflects this trend. Data from U.S. human resources service provider Alight Solutions shows that in the first half of March, trading volume in individual investors' 401(k) pension accounts surged to more than four times the normal level, reaching the highest trading volume in nearly five years over the past month.

Meanwhile, a survey by the American Association of Individual Investors indicates that the proportion of investors who are optimistic about the stock market has fallen to its lowest level since September 2022.

On March 16, The Wall Street Journal reported that an investor who had not touched their portfolio for years sold nearly half of their stock assets last Tuesday. They stated:

"I adjust my decisions almost every day, completely out of concern for Trump's economic policies, especially the tariff measures."

Former political advisor Patton Price emptied all stocks from his retirement account before and after Trump's inauguration, stating:

"This isn't some fancy investment theory; I just think no one knows what will happen next."

Financial services company TIAA reported that the number of client consultation calls has increased by about 10% over the past two weeks, many from those who previously tended to manage their portfolios independently.

Investors are not only withdrawing from U.S. stocks but are also actively seeking alternatives. According to data from the Investment Company Institute, retail investors had a net inflow of $30.4 billion into money market funds in the week ending March 5, marking the highest weekly record in over a year. Morningstar data shows that net inflows into U.S. physical gold ETFs exceeded $5 billion in February, with an additional $1 billion in the first half of this month. Gold prices surpassed $3,000 per ounce for the first time last week.

At the same time, data from the London Stock Exchange Group shows that last month, investors poured $1.8 billion into European stock ETFs registered in the U.S. Additionally, since the beginning of 2025, international markets have outperformed the U.S. stock market. The European Stoxx 600 index has risen 7.04% this year, while the S&P 500 index has fallen 4.13%.

It is noteworthy that investors' political positions significantly influence their market views. Francisco Ayala, a financial advisor in Phoenix, stated that a client who despises Trump recently inquired about how to move investments out of the U.S., while another Trump supporter viewed the market decline as a healthy adjustment. Some investors even actively bought stocks like Reddit and Broadcom during the market downturn, considering it an "exciting opportunity."