Bored Lockdown Traders Are a Danger to Themselves
Churning your investment portfolio can erode your returns.
Chasing the next hot stock.
Photographer: Chris Ratcliffe/Bloomberg
The Reddit-inspired trading frenzy that lured retail investors to invest in GameStop Corp., AMC Entertainment Holdings Inc. and even precious metals in recent days seems to be abating. But bored, housebound punters are likely to continue to click away their lockdown blues by trading securities. The danger is that they’ll erode the value of their investment portfolios by overtrading.
Hargreaves Lansdown Plc, which runs the U.K.’s biggest consumer investment platform serving almost 1.5 million customers, has seen the average number of daily trades it handles double in the wake of the pandemic, to about 40,000 transactions. The firm has seen days in the heart of the country’s lockdowns when more than 100,000 transactions have taken place. When mobility is restricted, trading activity increases.