TINA is back: Americans flock to stocks via retirement accounts, may push S&P 500 to all-time highs
The "TINA" trade is back as Americans, especially younger investors, are heavily investing in stocks through retirement accounts. Total 401(k) allocations to equities have reached $8.9 trillion in 2024, with younger investors allocating a significant portion to stocks. Goldman Sachs anticipates this demand will support high equity valuations, projecting the S&P 500 to reach 6,500 in the next 12 months.
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TINA Trade Sees a Comeback
401(k) Stock Allocations Hit New Highs
Retail Traders Fuel the Momentum
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Goldman Sachs Stays Bullish
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The 'TINA' trade, short form for 'There Is No Alternative', is making a powerful comeback as Americans, especially younger investors, pour money into stocks through their retirement accounts Goldman Sachs analysts revealed in a new note, reported Business InsiderAfter slowed TINA trade when interest rates began to rise in 2022, the stock market's TINA appeal has reignited, as per the report. With bond yields no longer pulling the same weight, many investors are turning back to equities, especially in 401(k)s, seeking long-term growth as other options appear less compelling, according to Business Insider.Goldman analysts highlighted the demand for stocks in US retirement accounts, with total 401(k) allocations to equities in the US increasing to $8.9 trillion in 2024, as per the report. The bank found that in 2022, 71% of 401(k) assets were allocated to stocks, which has jumped from 66% in 2013, Business Insider reported. Goldman also revealed that the allocation is even higher among account owners in their 20s, with the average investor allocating 90% of their portfolio to stocks, according to the report.The team of strategists led by David Kostin wrote in a note that, "TINA trade remains alive and well in US retirement accounts," adding, "We believe that persistent household equity demand and high allocations to equities will continue to support elevated equity valuations," quoted Business Insider.Even retail traders have snapped up a net $20 billion in stocks over the past three months, contributing to a surge in household stock ownership, as per the report. Goldman notes that US households now have 49% of their financial assets in stocks, which is the highest on record and the bank expects households to purchase another $425 billion in equities this year, Business Insider reported.While Goldman also expects the S&P 500 to a hit a record high of 6,500 in the next 12 months, which a 7% increase from the index's current levels, as per the report.With interest rates stabilizing and bond yields less attractive, stocks are once again the go-to for growth.In 2024, Americans have $8.9 trillion of their 401(k) money invested in equities.
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