Popular trading platform Interactive Brokers says retail investors are not sitting out the market correction, as they see the pullback as an opportunity to snap up discounted names.
In a new CNBC interview, Interactive Brokers chief strategist Steve Sosnick says retail investors are not bothered by the war in Iran as they continue to support the market by buying on dips.
According to Sosnick, it is possible that retail investors have been conditioned to see pullbacks as golden opportunities to pour more money into the market due to the fear of missing out (FOMO).
“The market internals tell me that we still have this underlying bid. There’s still this undercurrent of FOMO. There’s still nobody who wants to miss a rally. And as a result, partially because… that oil is not as bad as could be. We’re not at the depths that we thought we might be…
Or maybe it’s just because we’ve gotten so convinced that every dip is a buying opportunity and every presidential move can be undone, shall we say, that nobody wants to be the one who’s selling it out. And that’s the dynamic.”
Sosnick highlights that he’s seeing the most retail buying activity in two stocks.
“We still see people aggressively dip buying. Micron was the most active stock on our platform. It got the crap kicked out of it after earnings, and so people rushed in. One name that we do see a lot of people buying is VOO, which tells me that investors are seeing this as a longer-term possibility.”
Micron (MU) is down about 16% since its earnings report on March 18th, despite beating expectations. Meanwhile, the Vanguard S&P 500 ETF (VOO) is a low-cost exchange-traded fund designed to track the performance of the S&P 500 Index. Retail investors buying VOO indicates that they are seeing the market correction as a chance to position for the long haul.
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