Retail investors pour a record $1.5 billion a day into the stock market.

Individual investors are buying stocks at the fastest pace ever since US stock markets rallied earlier in the year.

Over the past month, retail investors have invested an average of $1.51 billion in U.S. stocks every day, the highest amount ever, according to data from research firm VandaTrack released Thursday.

“Given recent polls showing that the institutional investor community as a whole remains bearish on stocks, it would be unwise to underestimate the importance of the retail cohort,” VandaTrack strategists note. “This is consistent with retail sales and employment data for January, suggesting that consumers maintain an impressive level of purchasing power.”

Last month, retail investors invested an average of $1.51 billion a day in US stocks, the highest amount ever recorded.  (Source: WandaTrack)

Last month, retail investors invested an average of $1.51 billion a day in US stocks, the highest amount ever recorded. (Source: WandaTrack)

Tesla (TSLA) has remained the front-runner among this group, with retail equity inflows totaling $9.7 billion since the start of the year.

These appropriations come at a time when the electric car giant is making a comeback after shutting down its worst year ever in 2022. Tesla shares are up 74% in 2023 to close on Wednesday.

The SPDR S&P 500 ETF Trust (SPY), an ETF that tracks the benchmark S&P 500, was the second most popular buy among retail investors this year, with retail flows of $3.6 billion in 2023. The index rose by 8.2% year on year. date before Wednesday.

Amazon (AMZN), Apple (AAPL) and Nvidia (NVDA) rounded out the top five with $1.8 billion, $1.7 billion and $1.4 billion respectively. These names are up 20%, 19.5% and 55.8% this year, in that order.

Tesla CEO Elon Musk and his security team leave the company's local office in Washington, USA on January 27, 2023.  REUTERS/Jonathan Ernst.

Tesla CEO Elon Musk and his security team leave the company’s local office in Washington, USA on January 27, 2023. REUTERS/Jonathan Ernst.

More speculative, overpriced stocks also became popular buys, with investors once again opting for baskets of stocks favored by ARK Invest’s Cathy Wood.

Wood’s flagship ARK Innovation (ARKK) ETF, the flagship of high-profile tech stocks, saw modest growth in inflows this year but ranked 27th on the list of biggest buys from $169 million retail investors.

However, retail investors have caught on to key underlying names from the ARK family of exchange-traded funds — such as Coinbase (COIN), Block (SQ), Roku (ROKU) — faster than the firm itself, a phenomenon seen early in the COVID pandemic. pandemic.

“In 2020-21, it was common for retail investors to buy ARK ETFs while accumulating some of their most publicized underlying assets,” the VandaTrack team said. “While we do not expect retail speculation to reach these levels, it is noteworthy that retail investors are well ahead of Cathy Wood & Co. in terms of buying some of these names.”

ARK Innovation was up 38.3% on Wednesday.

“Rising inflows from retail investors underpin the outperforming performance of their favorite stocks,” VandaTrack researchers say, adding that retail inflows have driven $18.5 billion in capital injections into these companies in 2023.

“If the positive momentum in the broad equity market continues, it could push retail investors into more speculative stocks that are more receptive to such flows given their smaller market capitalization.”

Alexandra Semyonova, correspondent for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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