Why Are Retail Investors Piling Into Stock Market?

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July 14 (Bloomberg) –- Bloomberg’s Julie Hyman discusses retail investing and where the money is going. She speaks on “Market Makers.” (Source: Bloomberg)


That is the conventional wisdom.

All of these things depend on who you talk to.

If you do look at the average strategist surveyed on wall street, they are looking at the market to top out where it is today.

The huge market rally we have seen ever since march of 2009, retail investors really have not participated to the same degree that you would imagine, in part burned by the financial crisis, burned by their past investments.

It has taken them a long time to get back in.

They have missed a lot over that.

Of time -- they have missed a lot over that period of time.

We have seen $100 billion added to equity mutual funds and etf's. that is 10 times the prior months.

It has not been consistent every month.

Cumulatively, over the past year , over the past 12 months.

It is hard to look at retail money and decide whether it constitutes a market topping process are not because strategists and analysts will say on a fundamental basis, but if the money is pouring in, everybody else has to make the decision, do i sell?

And if i sell, where do i put the dough?

It is crazy to put it in fixed income.

They are kind of stuck in equities were some kind of alternative asset class.

-- or some kind of alternative asset class.

Alternatives are not a viable alternative for many.

If you have what retail investors are doing on one hand and on the other hand you have institutional strategist predicting things, you are not necessarily better off going with the strategists.

They have not been that accurate.

Half of the time, the s&p 500 ends the year more than 10% off of the average prediction.

If you go by what they are predicting, that is not necessarily going to get you there either.

Going into 2014, what we kept hearing that this was going to be the year of stock pickers.

That is not what retail investors are doing.

The money is going into etf's. exactly.

Stock pickers -- that strategy has its own issues of course.

Sure, you get retail investors buying individual stocks, but you have the booming popularity of things like index funds and etf's that counterbalance that.

What are we seeing happen with the strategists right now?

As the year goes on and we begin to see signs of an economic rebound, are they beginning to reevaluate?

I don't know if you guys have talked about it, but david goldman of goldman sachs -- david hoffman of goldman sachs raised his forecast today.

This is for the end of 2015, right?

I thought it was for the end of this year.

It is possible and missed that.

I'm sorry.

You're probably right.

It is the end of this year.

He is looking at a 4% gain.

Interesting that someone from goldman, well regarded, is raising it to that extent at this point in the game.

He is pointing to the stuff that most of the bulls are pointing to.

An accelerating economy, even if it is tepid, an accelerating economy.

Accelerating earnings.

We could see some catalyst there.

No fireworks.

Just continual, steady gains.

Just to clarify, it is by the end of this year.

I'm glad i did not misquote that.

Julie hyman, thank you so

This text has been automatically generated. It may not be 100% accurate.


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