AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Utime stock reddit4/30/2023 ![]() ![]() A recession is still a real possibility, and being overly invested in speculative bets is a sure way to feel the bite of a downturn and lead to another hibernation period. With the Fed still set to tighten monetary policy, retail investors' enthusiasm for risky assets could backfire like it did last year. To JPMorgan's Kolanovic, retail investors' optimism foreshadows future weakness in the stock market, as weak hands get wiped out by volatility, similar to how 2022 played out. Jobs data, consumer spending, and inflation all tell us the Fed isn't done raising rates. Ultimately, good news is still bad news for stocks. Since OpenAI's language bot, ChatGPT, has gone viral, investors have clamored to capitalize on the buzzy tech, sending shares of everything from chip makers to obscure tech names skyward in a gold rush for anything even vaguely related to the nascent space. New this year, too, is the AI hype-trade, which mirrors the FOMO trade of the meme stock days. Gene Goldman, chief investment officer for Cetera Investment Management, told Insider that retail investors bid up stocks in January because optimism for an economic soft-landing ticked up - despite the Fed's insistence that more tough monetary policy is still on the way. According to Fundstrat's Tom Lee, that number balloons to nearly $5 trillion if you include the $3 trillion sitting in money market funds held by institutional investors. Those that remained endured a brutal rout in 2022.īut fast forward to the last several weeks, and the retail cohort appears to be back, armed with a record $1.8 trillion in cash that's burning a hole in their pockets. Soon after, though, retail investors pulled out of the market at a furious pace as inflation climbed, the central bank raised interest rates, and risk appetite evaporated. These bets ended in big losses for some hedge funds that were squeezed while attempting to short these names. In the early days of the COVID-19 pandemic retail investors, flush with stimulus money from the government and rock-bottom interest rates, bet big on a handful of struggling companies including GameStop, AMC, and Bed Bath & Beyond. No cash balance or cash flow is included in the calculation.Bullish sentiment and a bleak economic outlook Please note all regulatory considerations regarding the presentation of fees must be taken into account. Backtested results are adjusted to reflect the reinvestment of dividends and other income and, except where otherwise indicated, are presented gross-of fees and do not include the effect of backtested transaction costs, management fees, performance fees or expenses, if applicable. Actual performance may differ significantly from backtested performance. Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized. Since trades have not actually been executed, results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity, and may not reflect the impact that certain economic or market factors may have had on the decision-making process. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. ![]() Backtested performance is developed with the benefit of hindsight and has inherent limitations. This information is provided for illustrative purposes only. No representations and warranties are made as to the reasonableness of the assumptions. Certain assumptions have been made for modeling purposes and are unlikely to be realized. Changes in these assumptions may have a material impact on the backtested returns presented. General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Backtested performance is not an indicator of future actual results. Disclaimer: The TipRanks Smart Score performance is based on backtested results. ![]()
0 Comments
Read More
Leave a Reply. |