Ghost of Igloi wrote:
'This year, millions of new young people, many of whom are bored at home during the pandemic, have started trading stocks, ETFs and options for the first time. They've become such a force that these retail investors are even credited with moving markets.'
—Bloomberg
Sounds like junk journalism to me. You should know better.
If they had even an iota of evidence that the new, young traders are moving markets, could they site it? Isn't that the point? Put up or shut up.
So, i read up on the topic, and while there is a lot of reporting that the number or new accounts opening up this year includes a lot from new, younger, first time investors, one critical detail is not disclosed - do these accounts have balances which make any difference to influence market movement? Common sense would lead you to believe they don't.
Here's the closest thing i could find regarding the impact of these new, younger investors, taken from Barron's, link available upon request:
"The evidence is mixed about whether the new blood has affected the broader market. Trading volume in the S&P 500 index spiked in March, but has eased back since, according to Capital Economics. And Barclays analyst Ryan Preclaw found that a rise in Robinhood holders actually corresponds to lower returns for stocks, on average. But surging volume in certain stocks has clearly given some left-for-dead names new life."
I am of the belief that these new accounts are relatively small in the big scheme of things. And I am also of the belief, good for them. Maybe they just landed themselves into the buying opportunity not to be replicated for many years. In reading the articles, there is some mention of them being very much aware that paper profits are transient, and that they are not racking up large margin debt or highly leveraging.