Retail investors are set to rake in a record $ 1 trillion in stocks this year – and the flows have in fact accelerated over the past month, according to JPMorgan



  • Individual investors invested nearly $ 500 billion in equity funds this year, JP Morgan mentionned.
  • At the current rate, they could be on track to sink a record $ 1 trillion in stocks in 2021.
  • The bank also noted that retail business has accelerated again since mid-May after cooling off after the GameStop commercial saga in January.

Retail investors could be on the verge of paying a record $ 1,000 billion in shares in 2021, JPMorgan said.

Since the start of the year, retail investors have invested around $ 485 billion in equity funds, while the retail momentum in stocks and individual options has re-accelerated since mid- May, said a team led by Global markets strategist Nikolaos Panigirtzoglou in a recent note.
A metric that measures retail purchases of bullish call options hit an all-time high in January at the height of GameStop’s trading frenzy. As the market cooled, the metric sagged between February and April. Now it has recovered and is currently at its highest level since January. The record inflows come as retail investing is hugely popular and social media picks up on “actions even“Like AMC and BlackBerry raise stock prices to levels that are apparently unrelated to fundamentals.

By the end of 2020, JPMorgan estimated that retail investors would invest $ 500 billion in stocks throughout 2021. But if the current pace of buying continues, that number could rise to $ 1,000 billion, Panigirtzoglou said.

Read more: 2 hedge fund veterans say ‘we know how this movie ends’ as investors pile into meme stocks They unbox their strategy to find outliers in the market – which has ‘done a killing’ in the volatility of 2020


Other metrics JPMorgan uses to assess retail investment flows also show that the situation for the retail trader is stronger than ever. For example, a basket of stocks popular with US retail platforms has rebounded from mid-May and has outperformed the S&P 500 since March 2020. (JPMorgan did not disclose the individual stocks in the basket.

In addition, the performance of a portfolio of which 50% is allocated to the Nasdaq and 50% to the Russell 2000 has outperformed the S&P 500 and has rebounded since mid-May. JPMorgan said this 50/50 split between tech stocks and small caps reflects the dumbbell trading that retail investors tend to favor. However, it remains to be seen whether the pace of retail investment will continue through 2021 and in which areas of the stock market it will be concentrated.

Vanda Research does not expect the momentum in the memes stock to continue for much longer.

“Squeezing heavily shorted stocks is quickly out of fashion,” senior strategist Ben Onatibia and analyst Giacomo Pierantoniwhich said earlier this week.

JP Morgan


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