According to recent reports from brokerage firm TD Ameritrade, Main Street is becoming more daring than its counterpart in brokerage and financial services, Wall Street. In a Bloomberg report in Investment News, ordinary investors are starting to invest more on US equity indexes. This means that these smaller companies are steering from single stocks.
TD Ameritrade Chief Marketing Strategist Joe Kinahan reveals that ordinary investors are buying more of the overall market, instead of individual equities. Because the majority of retail investors remain to be net equity sellers, it is too early to tell what this means. However, it definitely shows that this sector is gaining confidence.
This newly found confidence by the so-called mom and pop businesses is noticeable in the S&P 500 Index, which had an average of 2,752.22 this February. Whilst this is the highest since October 2018, the position dropped to 2,786.42, according to recent data.
With people looking at stock picking, more investors are turning to exchange-traded. In fact, towards the end of February, Bank of America clients let go of their single stocks and bought exchange-traded funds.
This has been happening since November 2018, when Bloomberg reported that ordinary investors are opting for index funds as these have zero costs. However, Bloomberg also stated that this new emergence of free trade will cost Main Street, which can be curbed by regulators.
Experts look forward to economic data generated during earnings season to see how this will turn out.