The wave of new, individual investors who flooded stock markets in 2020 have not drained away, even as market conditions have become increasingly unfriendly.
But the findings still suggest “the observed expansion of investors in 2020 was not merely a temporary uptick related to the pandemic or market conditions, but a durable rise in the investing population,” the authors said Tuesday. Stocks closed sharply lower in a Tuesday sell-off after Federal Reserve Chairman Jerome Powell told senators the central bank is open to steeper interest-rate hikes. The Fed began increasing its benchmark rate to quell inflation last March, and its next meeting is scheduled for March 21-22.
But new investors were about twice as likely to pull money, the survey showed. While 16% of experienced investors withdrew money, 31% of new investors pulled money. These investors said they rely less now on news media for their investing decisions, at 26%, versus 33% previously.