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How Retail Investors Beat Out the ‘Smart Money' This Quarter
How Retail Investors Beat Out the ‘Smart Money' This Quarter

Business Insider

time26-05-2025

  • Business
  • Business Insider

How Retail Investors Beat Out the ‘Smart Money' This Quarter

Retail investors are getting credit for smart timing after helping fuel a major rebound in the stock market. In fact, while $74 billion flowed out of mutual funds and ETFs in April, everyday investors bought the dip, which led the S&P 500 (SPY) to its fastest bounce since 1982. Interestingly, JPMorgan strategist Emma Wu said retail investors have added over $50 billion to stocks since April 8, including $7.5 billion in just the past week. Separately, RBC's Amy Wu Silverman told Yahoo Finance that it was actually institutional investors, known as the 'smart money,' who pulled back, so they're now the ones who need to catch up. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Indeed, investors who bought during the April 3 to May 9 dip made nearly a 12% return, according to data from Public. That strong rally led Bank of America to report that retail clients took profits for the first time in 23 weeks. In addition, Public CEO Leif Abraham said that 'buying the dip' has become a normal part of retail investing. However, even though retail investors are doing well now, there are still risks ahead. In fact, Invesco strategist Brian Levitt said that long-term investors should stay invested through market ups and downs, because the best days often come right after the worst. He noted that despite many market crashes since 1998, the U.S. market has still returned about 12% per year. However, Silverman warned that recent delays in tariffs could still cause trouble. As a result, investors should stay cautious moving forward. Is SPY a Buy Right Now? Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust based on 423 Buys, 74 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $656.31 per share implies 13.3% upside potential.

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