Retail investors have sold all of the stocks they bought during the pandemic trading boom

• Retail investors have sold all of the stock they bought during the COVID-19 trading boom, according to Goldman Sachs.
• Goldman said in a Thursday note that it has observed "rapid retail selling" across stocks found in the S&P 500 and Nasdaq 100.
• "Selling over the past 11 months has completely reversed all the net buying in single stocks from 2019 to 2021," Goldman said.

The retail trading boom is officially over, according to a Thursday note from Goldman Sachs.

The stimulus-fueled trading frenzy among individual investors took over the stock market in 2020 and 2021, with everything from meme-stocks to cryptocurrencies soaring in value.

But it appears the steep sell-off in speculative stocks that began in February 2021 and continued all the way through the end of 2022 has taken its toll on retail investors, combined with soaring interest rates and elevated inflation.

"Retail net selling activity has accelerated over the past six months. In aggregate, selling over the past eleven months has completely reversed all the net buying in single stocks from 2019 to 2021," Goldman Sachs said.

The bank's analysts based their research on the net buying activity of retail investors through its trading desk, which identifies trades that go through Payment for Order Flow channels, according to the note.

A similar story can be told about the crypto sector, which has erased more than $2 trillion in market value from its peak as scandal after scandal dents trust in the space. According to a recent note from Bank of America, crypto trading volumes have been plummeting at various exchanges, like Coinbase, as retail investors finally throw in the towel.

As for what retail investors are still holding on to, it's technology and consumer discretionary names, according to the note. Popular stocks in those sectors include Tesla, Amazon, Apple, and Microsoft. Meanwhile, retail investors were net sellers of healthcare and utility stocks.

Goldman noted that while they believe its data is an accurate representation of retail investors that buy single stocks, it doesn't encapsulate retail buy-and-hold investors that are primarily trading ETFs for their allocation to equities.

On that front, individual investor ETF flows have remained steady and strong from 2019 to 2021.

So, while some retail investors may not have completely thrown in the towel on the stock market, they are shifting away from the speculative "YOLO" trading activities that were prevalent throughout 2020 and 2021, in favor of a more long-term approachchampioned by legendary investors like Warren Buffett and Jack Bogle.