Individual investors enjoyed another strong year by sticking to big-cap tech stocks with a proven track record of big profits and promising advances in artificial intelligence.
banda research Net new inflows into the U.S. market by self-directed retail investors are expected to end the year with about $265 billion. While this is $25 billion less than the average over the past three years, it is still within the post-COVID-19 range and shows a healthy appetite for average investors to be involved in the market, according to data from Vanda Research. It shows.
The six company tickers with the most retail investor inflows were high-tech momentum trading figures: AMD (AMD), Nvidia (NVDA), Apple (AAPL), Palantir (PLTR), Tesla (TSLA), Amazon (AMZN). These five companies had total retail inflows of $67.7 billion this year. Nvidia has overtaken Tesla as the most popular stock among retail investors, at least based on inflows.
NVIDIA has received $29.8 billion in retail net inflows this year, up from $11.4 billion last year, according to Vanda Research findings. Retail inflows to Tesla fell to $14.7 billion from $48 billion in 2023.
However, Tesla still holds the top spot in individual investors’ portfolios over Nvidia, with an average portfolio weight of 10.58% compared to Nvidia’s 10.33%.
The remaining top four tickers were index-based trading leveraging popular themes such as AI. namely, Direxion Daily Semiconductor Bull 3X Shares (SOXL), Invesco QQQ Trust (QQQ), ProShares UltraPro QQQ (TQQQ), and SPDR S&P 500 (SPY). .
“2024 was an eventful year for the market,” said Marco Iachini, senior vice president at Vanda Research. “For the average individual investor, it’s been another year of great portfolio performance. Loyalty to tech companies has been rewarded.”
In fact, that loyalty to technology paid off.
Vanda Research estimates that the average retail portfolio grew by 40.74% this year, marking the second-best performance since 2014. Over the past 10 years, only 41.94% of 2023 performed better.
Vanda Research reports that on a flow-adjusted basis, this is the second time retail investors have beaten the S&P 500 (^GSPC) in consecutive calendar years and the first time since 2014 that non-institutional investors have beaten the S&P 500 (^GSPC). He pointed out that it was his first time. Nasdaq Composite (^IXIC).
No one knows whether the good times for individual investors will continue into 2025.
On the positive side, the incoming Trump administration has promised business-friendly policies, including: reduce government spending Extend tax cuts through Elon Musk’s Department of Government Efficiency (DOGE).
