Retail Traders Persist in Buying the Dip, Suffering Consequences
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Individual investors injected significant amounts of money into the market amid a significant decline in the S&P 500 on Thursday. The preference was towards S&P 500 ETFs and Nvidia, while Tesla shares were being sold off. Despite individual investors purchasing $4.7 billion in stock a day earlier, the S&P 500 fell by an additional 3%.

On Thursday, when almost every sector of the market experienced a downturn, retail traders significantly increased their stock investments, although they were met with another day of losses on Friday. Throughout this year, individual investors have been attempting to buy low during market declines but have struggled as uncertainty surrounding President Donald Trump's actions continues to impact the market negatively.

JPMorgan noted that the "buy-the-dip" strategy has become more prevalent since 2022; however, the results have been mixed, with retail investors facing higher losses compared to the market's overall performance. Retail investors remained active even as the S&P 500 suffered its biggest one-day decline since 2020.

Despite the encouraging net buying of $4.7 billion by retail investors on Thursday, the market took another hit on Friday, with the S&P 500 opening 3% lower. Throughout the year, retail investors have continually invested large sums in stocks, resulting in significant inflows by the end of March, yet the S&P 500 has shown a decline of about 9%.

Stock preferences on Thursday included investments in Nvidia and S&P 500 ETFs, while Tesla experienced net selling. The market turbulence followed Trump's unexpected tariff announcements, raising concerns about a potential trade war and its impact on inflation and global economic growth.

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