Retail Investors Reap Rewards in 2024
Tech Giants Dominate Retail Portfolios
Retail investors had a stellar year in 2024, with a strong affinity for large-cap tech names that drove significant profits and advancements in artificial intelligence. According to Vanda Research, approximately $265 billion in net new inflows poured into US markets from self-directed retail investors, a testament to their continued engagement with the markets.
The Top Six: A Who’s Who of Tech Momentum Trades
The six corporate tickers with the most retail investor inflows were a familiar bunch: AMD, Nvidia, Apple, Palantir, Tesla, and another prominent tech giant. These five names collectively attracted $67.7 billion in retail inflows this year. Nvidia emerged as the most popular stock among retail investors, surpassing Tesla with $29.8 billion in retail net inflows, up from $11.4 billion last year.
Nvidia Takes the Crown, but Tesla Remains a Favorite
Tesla’s retail inflows dropped to $14.7 billion from $48 billion in 2023, yet it still maintained its position as the top holding in retail investor portfolios, representing a 10.58% average portfolio weighting. Nvidia followed closely, with a 10.33% weighting. Other popular index-based trades included Direxion Daily Semiconductor Bull 3X Shares, Invesco QQQ Trust, ProShares UltraPro QQQ, and SPDR S&P 500.
A Banner Year for Retail Portfolios
Vanda Research estimates that the average retail portfolio is up 40.74% this year, the second-highest performance since 2014. This marks the second time retail investors have outperformed the S&P 500 in back-to-back calendar years and the first time they’ve beaten the Nasdaq Composite since 2014.
Looking Ahead to 2025: Opportunities and Challenges
While the incoming administration’s business-friendly policies, such as tax cuts and deregulation, may spur growth, concerns about inflation and Fed policy uncertainty could impact the markets. The outlook for 2025 is mixed, with potential opportunities in individual stock picks, particularly in sectors like EVs, AI, healthcare, and quantum computing.
Expert Insights and Top Picks for 2025
MarketGauge chief strategist Michele Schneider predicts a year of fluctuations, but sees significant opportunities in individual stock picks. Her top picks for 2025 include AbbVie, Kratos, International Business Machines, Salesforce, Coinbase, Chewy, Ulta Beauty, Alibaba, and Rivian. While these may not be typical retail investor favorites, they could garner attention in the coming year.
Leave a Reply