Bitcoin and equities expected to flood $6 trillion of retail investor capital
According to Tom Lee of Fundstrat, retail investors have piled into bonds over the past decade.
He claimed earlier this month that 94% of retail money has gone into bonds. Of the estimated $3.1 trillion in retail investor inflows since 2008, only $183 billion, or 6%, has gone into the stock market, Lee said.
That estimate is based on data collected by One Bitcoin a Day the research firm, with Lee saying in a recent interview that more than $6 trillion in funds is now expected to flow from bonds into equities this decade.
This year, bonds in particular have seen huge inflows, breaking records in the summer: $22.5 billion flowed into US bond funds in just one week.
Inflows into bonds over the last five years
We see a huge jump in bonds for much of 2020, and overall they have increased significantly since January 2016.
„Investors have been liquidating equities at an accelerated pace since 2017,“ says Lee – but that seems to be changing.
Since November in particular, equities have attracted significant investment. A record $81 billion flowed into equities that month, bringing the total for the year to $196 billion.
Bonds, on the other hand, attracted only $17 billion in November for a still sizable total of $192 billion.
Equity inflows since the 1990s
Hopes of a quick recovery due to the introduction of vaccines are creating a frenzy in the stock market, with small investors in particular buying up what they think are undervalued shares in retail companies, such as cinemas or even gambling houses.
In some ways, the latter has become a sprawling narrative that risks losing the forest for the trees when it comes to GME – but it is a very bombastic little part of a much bigger story that is building into rising optimism for an economic recovery.
What’s more, millennials in particular tend to prefer to take investments into their own hands rather than put them into some index or fund.
This is partly because indices have been accused of being too powerful and almost monopolistic, 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 the increased accessibility to the stock market, we could see a trend where retail investors are increasingly taking these investments into their own hands to chase returns that have been in bitcoin (Go to Buy Bitcoins with Instant Bank Transfer Guide) and equities since November at least.
This generational shift, where stocks and investing in general are no longer something for financiers or the rich, but something for everyone, even the $1,000 man, will take ever greater shape – especially as $68 trillion is set to be inherited by millennials from boomers – who are now grannies.