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1. will record retailers save jan effect via predetermined index flows ? 2. are professionals really pessimistic re:2026 ? 3. can we apply anything normal to a trump era?
"... the market has been driven to record height levels this year by retail investors, not institutional investors, who are sitting mostly on the sidelines according to Business Insider and Vanda Research, with the latter reporting that cumulative retail net purchases of stocks and ETFs hit the highest level in the first six months for 2025 in at least the past 10 years."
If true, that raises serious concern. Years ago it was often said that retail investors were usually "the last in and the last out." - meaning they tended to buy at tops and sell near bottoms.
Rieder and Faber discuss seasonal patterns a little bit at the start of the interview I linked elsewhere. They seem to find them both real and non-sensical. But Rieder does mention a flood of new money coming in in January among other factors that tend to bolster markets. In addition, some portfolio managers decide to lock in a good annual return by selling high-flyers in December.
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If true, that raises serious concern. Years ago it was often said that retail investors were usually "the last in and the last out." - meaning they tended to buy at tops and sell near bottoms.
Rieder and Faber discuss seasonal patterns a little bit at the start of the interview I linked elsewhere. They seem to find them both real and non-sensical. But Rieder does mention a flood of new money coming in in January among other factors that tend to bolster markets. In addition, some portfolio managers decide to lock in a good annual return by selling high-flyers in December.