Young people are the future … and the present of the bags. At a time when many market analysts – such as at BTIG Research or Morgan Stanley – are warning that the stock market correction is about to arrive, when the most doomsayers remember that September is not a good month for the stock markets , JPMorgan they cling to youth to keep the bullish flame alive.
In a note to his clients, Nikolaos Panigirtzoglou, one of the investment firm’s strategists, emphasizes that the continuity of the upward path on Wall Street will depend on whether the retail investor continues to go to equities or prefers to fish in other fishing grounds.
“What could cause a stock market correction? It’s a really tough question to answer. So far this year, retail investors have been buying stocks and equity funds at such a steady and steady rate that it makes a correction of the variable income seems quite unlikely, “they point out from the bank.
In this sense, Panigirtzoglou stresses that there is a ‘domino effect’ whereby the aforementioned capital inflow has led to extra growth, fulfilling the old aphorism that ‘money calls money’. And in this they have played and can be playing a fundamental role the younger and the carefree investment style that allows trading applications such as Robinhood.
“As certain retail investors, most likely the youngest, aggressively buy equities and stocks , they push the equity market higher, causing ‘other’ older retail investors to unwittingly overweight their income variable “, they point.
From JPMorgan they do warn, however, that the percentage of money allocated to equities by non-bank investors is 46% of the total, a figure that has only been exceeded once in the last 13 years. So far this century, only in the year 2000 and before the collapse of Lehman Brothers has it touched or exceeded 50%.
Throughout 2021, the major US stock indices have closed at record highs more than 50 times. The economic recovery, coupled with rising inflation and low interest rates on deposits and fixed income, have fueled the equity boom in recent months, with the world’s major stock markets posting mostly double-digit gains. In the case of the US, the Dow Jones grew 15.5%, surpassed by the Russell 2000 (16.1%), the Nasdaq Composite (19.2%) and the S&P 500 (20.7%).
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