Individual Investors Slow Stock Purchases, Leaving Markets Vulnerable

By Hannah Miao | April 2, 2023

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Retail Investors Summary: Individual investors are losing their appetite for U.S. stocks, leaving equity markets without a dependable leg of support after a rocky first quarter. They bought beaten-down shares with a fury at the start of 2023 and chased the momentum as the S&P 500 climbed. Net purchases of U.S. equities by individuals reached a monthly record in February, according to Vanda Research data going back to 2014. But individuals stock purchases have slowed sharply in recent weeks, falling to levels not seen since November 2020, Vanda data show.

Questions: What factors are diminishing retail investors' enthusiasm for investing in stocks?

How are institutional investors responding to the current macroeconomic and equity markets environment?

Discuss the role of Tesla in connection with individual investors' appetite for equities.

Given recent movements, how are equities valued relative to historical experience?