Mom-and-Pop’s Top Picks Tend to Trail Stock Market, Goldman Says
- Study finds stocks with retail activity spikes underperform
- Analysis is latest to question retail-investor role in rebound
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Retail investors’ favorite stocks have for the most part been underperforming the broader market, according to an analysis by Goldman Sachs that is the latest to call into question the role they’ve played in the massive rebound.
In a study of recent market performance, analysts led by John Marshall found that when there is a spike in individual-investor activity in a stock, the shares typically lag behind the broader market over the next two weeks. Conversely, shares of stocks where individual-investor activity in their options is the highest tend to outperform, according to their analysis.