Fundstrat’s Tom Lee says retail investors have rushed to buy bonds over the past decade.
He claimed earlier this month that 94% of retail client money went into bonds. Of the estimated $ 3.1 trillion in retail inflows since 2008, only $ 183 billion, or 6%, has gone into the stock market, Lee said.
That estimate is based on a survey by the research company, with Lee saying in a recent interview that it is now believed that more than $ 6 trillion in bond-to-stocks will be poured into stocks this decade.
This year, bonds in particular have seen huge inflows that broke records in the summer: In just one week, $ 22.5 billion flowed into US bond funds.
Inflows into bonds over the past five years
We’re seeing a huge jump in bonds for much of 2020, and overall they have increased significantly since January 2016.
„Investors have been liquidating stocks at an accelerated pace since 2017,“ Lee said – but that seems to be changing.
Equities have attracted significant investment, especially since November. That month, a record $ 81 billion was poured into stocks, bringing the total for the year to $ 196 billion.
By contrast, only $ 17 billion flowed into bonds in November, out of a still considerable total volume of $ 192 billion.
Stock inflows since the 1990s
The hope of a quick recovery due to the introduction of vaccines is causing a frenzy in the stock market, with small investors in particular buying up what they believe to be undervalued stocks in retail companies such as cinemas and game libraries.
The latter has in some ways become a sprawling narrative that risks losing the forest for the trees when it comes to GME – but it’s a very bombastic little part of a far bigger story that leads to rising optimism for an economic one Recovery condenses.
In addition, the millennials in particular tend to prefer to take investments into their own hands rather than put them in any index or fund.
This is partly because the indices have been accused of being too powerful and almost monopoly, so a turnaround was only a matter of time.
With many of these bond investments being made by fund managers on behalf of their retail clients, with improved access to the stock market, we could see a trend where retail investors are increasingly taking these investments into their own hands to hunt for returns that have been in at least since November Bitcoin (to buy bitcoins with instant transfer instructions ) and stocks lie.