Individual investors bought US stocks on dips in August.
When US stocks fell, individual investors saw buying opportunities.
According to the Zhixin Finance APP, in the first five trading days of August,$S&P 500 Index (.SPX.US)$it fell by about 5.9%,$Nasdaq Composite Index (.IXIC.US)$it fell by nearly 8%, and $Dow Jones Industrial Average (.DJI.US)$ fell by 5.1%.
This round of decline occurred after the S&P 500 and Nasdaq fell for two consecutive weeks. Although Wall Street seems concerned about the future, individual investors remain steadfast.
Data released by Vanda Research on Wednesday shows that individual investors actively bought in during the market turmoil in early August. This buying momentum broke the trend of individual investors' relatively flat participation in the second quarter and demonstrated a strong desire to 'buy on dips' when stocks fall.
Vanda Research also pointed out that the second half of the year is usually a period of relatively calm activity for individual investors, making this buying behavior even more noteworthy.
What are these individual traders buying? According to Vanda's data, individuals are more inclined to buy individual stocks rather than ETFs, especially in technology stocks. This also coincides with the current trend of individual investors to allocate more technology stocks in their portfolios.
In the past month, technology stocks have been hit hard, with the 'big seven' entering the adjustment range, followed closely by the Nasdaq index. Therefore, the rebound in individual trading volume is more proof of the existence of bid buying. $NVIDIA (NVDA.US)$And other semiconductor stocks benefitted from individual investors' bid buying.
At the same time, as one of the most popular ETFs for individuals to track the market, the trading activity of $SPDR S&P 500 ETF (SPY.US)$ remained relatively flat. Although it rebounded in early August, the net purchase volume of individuals for SPY is still far below the level of the past two years.
It is worth noting that the ETF that initially attracted the attention of individual investors is $iShares 20+ Year Treasury Bond ETF (TLT.US)$ . This may indicate that individual investors want to lock in high bond yields before the Fed begins to cut interest rates by buying long-term treasuries.
Editor/Somer