Retail traders have now lost all the money they gained during the pandemic, according to Morgan Stanley
Retail tradershave now lost all the money they gained during the pandemic, according to a Morgan Stanleyseen by Bloomberg.
- A brutal Federal Reserve-driven sell-off has whacked the tech and
meme stocksbeloved by young amateur investors.
But they've now lost it all thanks to the brutal Federal Reserve-driven sell-off that has whacked equities in recent months, according to a Morgan Stanley note seen by Bloomberg.
Morgan Stanley's trading team estimated that amateur investors are now exactly where they started in January 2020, Bloomberg reported.
Millions of Americans started actively investing in stock
Tech stocks fared particularly well in 2020 and for the first half of 2021 as governments and central banks pumped money into economies, pushing investors towards the more speculative corners of the market.
But the Federal Reserve's moves to hike interest rates aggressively have brought the easy-money era to an end and contributed to a dramatic fall in tech and meme stocks.
Nio is down around 74% from its June 2021 high; AMD has dropped 45% from its November high; and Tesla has fallen 34% since peaking in the same month. The tech-heavy Nasdaq 100 index has tumbled more than 25% since peaking in December.
Retail traders bought $14 billion of stocks in April, the second-slowest uptick since the back end of 2020, Morgan Stanley said, according to Bloomberg.
Data from the bank showed that amateur investors are increasingly buying pessimistic "put" contracts — which profit from stocks falling — rather than optimistic "calls".
- India's GDP grows 7.6% in July-September quarter
- 8 Delicious ways to add spinach to your breakfast
- iQOO 12 camera overview – Samples reveal photography prowess
- She power: The top 10 youngest women entrepreneurs in India
- Tata Technologies records seventh-highest listing day gains in India