Delta variant spread prompted one in three traders to change their investment strategy, according to Charles Schwab
- A third of traders have reset their wallets due to the Delta COVID variant, an investigation by Charles Schwab has revealed.
- An increase in exposure to stocks, cash or fixed income have been the three most popular changes among individual traders.
- Inflation and the risk of a market bubble are also on the minds of traders, who believe volatility will only increase.
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The outbreak and spread of the Delta coronavirus variant has led 33% of active stock traders to change strategy to prepare for its impact, with an additional 50% willing to change course if necessary, a survey of Charles Schwab.
The pandemic has been the main concern of stock traders for the remaining months of 2021, even beating inflation, the provider of the trading platform said in its report released on Friday.
Of those who adjusted their weightings, 44% increased their exposure to equities. Cash attracted 37%, while 34% turned to fixed income assets, making them the most popular changes.
The increase in Delta variant cases around the world has weighed on markets in recent weeks, with investors growing concerned that it could introduce new and new foreclosure restrictions with an associated impact on the recovery. economic.
There has been a wave of people turning to commerce during the pandemic, noted Charles Schwab. Almost half of those surveyed say they adjust their approach every month, if not more often, to deal with changing risks.
“The past eighteen months have sparked an influx of new traders into the market, and as we examine this data we find that new and seasoned traders are tuned in to the pressing issues of inflation and variation. Delta, “Barry Metzger, head of commerce and education at Charles Schwab, said in a statement.
Inflation was viewed as a risk by 95% of those surveyed. Nearly half think high rates are here to stay, at odds with the Federal Reserve, which has said the current unusually high inflation is transient. Markets have reacted sensitively to the release of US inflation data in recent months as it is seen as a factor in the Fed’s decision on whether and when to withdraw the monetary stimulus. This support reinforced the actions.
At the same time, 86% of those polled believe it is likely that they are in a stock market bubble, according to the survey. Investment strategists have issued warnings about US stocks as they continue to rise. Richard Bernstein called the current market situation the biggest bubble of his career, while “Rich Dad Poor Dad” author Robert Kiyosaki told investors to prepare for a “terrifying” stock market crash.
At the same time, the survey indicated that so-called memes stocks still have fans, with almost half of them saying they’ve traded stocks like GameStop and AMC Entertainment this year. Shares of these companies exploded earlier this year, pushed up by overwhelming demand from retail investors, many of whom have flocked to Reddit.
More than a quarter of those surveyed said they traded stocks even for fun, rather than as part of a trading plan. Most see the trend as here to stay next year, with only 23% agreeing it is unlikely to continue.
Conducted in recent weeks, the study surveyed 500 U.S. traders who complete 36 or more trades each year.