Retail traders are selling stocks for the first time since 2023

They dumped US$20.6 million worth of shares on March 23. Read more at straitstimes.com.

NEW YORK – For retail investors, the US stock market’s most reliable dip buyers in recent years, risks are starting to outweigh the rewards.

The cohort on March 23 notched its first day of net selling of single stocks since November 2023, dumping US$20.6 million (S$26.3 million) worth of shares, according to data from Vanda Research. That came as the S&P 500 Index rallied after US President Donald Trump eased back on his threat to bomb Iran’s energy infrastructure.

Demand from this segment had been subsiding steadily as the conflict in the Middle East dragged on. And though they were back to buying on March 24, the hint of ebbing enthusiasm from a group that has pounced on every pullback over the past few years is worrisome at a time when US equities are already under pressure.

“The trend since the start of March has been one of gradually receding retail participation, alongside systematic deleveraging and only modest buying from long-only and hedge fund investors on the other side,” Ms Ruta Prieskienyte, a macro strategist at Vanda, wrote in a note published on March 24.

On the same day, mum-and-pop investors snapped up roughly US$262.3 million in shares as at 12.50pm Eastern Time as the S&P 500 edged lower. The American equities benchmark is down almost 5 per cent this month.

There is more evidence individual investors are losing confidence in the outlook for stocks. A Citadel Securities gauge of retail’s risk appetite has declined sharply from February highs.