The Dumb Money Investor Was Crushed This Week In The Stock Market

Mom and Pop retail investors, known on Wall Street as “dumb money”, are always the last ones to the party.  That holds especially true today. In the case of the recent stock market crash, the dumb money retail investors are the ones getting crushed. After sitting in fear on the sidelines for years after the credit crisis, retail investors have recently raced back into the market. In January, there were record in-flows into stocks and Exchange Traded Funds, ETFs, largely by retail investors. They felt the Fear of Missing Out – FOMA – on the market gains of the past several years. They wanted back in. Urgently. Turns out that recent move into ETFs and stocks was definitely ill-timed and most likely too late to capture the stock market’s historic gains. Retail investors are probably hearing the usual refrains from their brokers to shift to so-called “defensive stocks” or to “buy on the dips” and “dollar cost…

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