Stock market turbulence may not be scaring off retail investors: 'We’re not seeing investors respond the way they typically have'

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For all its downward dips so far this year, the stock market may not scaring off many retail investors, polling and purchase data suggest.

In fact, their mood may arguably be more upbeat than some of the big institutional heavyweights as inflation stays red hot, recession talk continues and everyone waits to see just how far the Federal Reserve will go to curb inflation.

People appear to be keeping the lessons of the pandemic-induced stock market drop and subsequent resurgence in 2020 at the front of their minds, said Greg McBride, Bankrate’s chief financial analyst. Meanwhile, more than half of Charles Schwab SCHW, +0.48% clients said they had a bearish view of the stock market during the second quarter, according to a May survey. Yet 55% said they were not tweaking their risk exposure and just 9% said they were pulling cash out of their portfolio.

In this context, Peterffy said a wise move for a retail investor is avoiding too much exposure to stocks and keeping cash temporarily on the sidelines where it can at least reap more interest in a time of rising rates.

 

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