TOKYO - When the coronavirus pandemic sent shares plunging, you didn't have to be a professional investor to spot a buying opportunity. In fact, it might be better if you weren't.
"If everyone is going into the same name and something happens, those names are likely to be sold off quite aggressively," said Catherine Yeung, Fidelity International's investment director."I think we just need to be wary that market seems a bit complacent at the moment." In the US, Robinhood and the Reddit forum called r/wallstreetbets have become a dominant force in the market, boosting everything from the stocks of bankrupt companies such as Hertz Global Holdings Inc to revenue-less start-ups like truck maker Nikola Corp. That pattern has been repeated in Europe with brokerages in Germany, the UK and France all reporting a jump in participation by individual investors, fueled by a fear of missing out.
In the Philippines, AAA Southeast Equities saw two to three times more new online brokerage accounts opened each month from March when the lockdown was imposed, said president William Matthew Cabangon. Meanwhile, India has seen 1.8 million new accounts opened since March, while South Koreans are borrowing to fuel their purchases.
A 35-year-old Japanese housewife, who had long watched her husband and parents buy stocks and get gifts typical for shareholders, never before found the right time to start buying herself. A separate Nikkei Money survey of more than 30,000 individual investors found that of those who had started this year, just 0.1 per cent had thought about quitting due to losses, with close to 60 per cent either happy with their performance or wanting to invest more actively.Well, who wouldn't be happy with their performance in the market that goes up regardless of bad news? The question turns to whether these investors will cut and run during the next dip, or learn new ways to succeed.
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