- Stocks now represent 41% of financial assets of U.S. households, according to data from JPMorgan and the Federal Reserve.
- Robinhood tripled its first quarter order flow payment revenue amid rising retail traders.
- Warren Buffett warns investors are “just as sure” of themselves as they were in 1989 before a mini-crash.
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Americans now hold a higher percentage of their net worth in stocks than ever before, The Wall Street Journal reported Monday based on data from JPMorgan and the Federal Reserve.
US households increased their holdings of stocks to a record high of 41% of their total financial assets in April.
Nikolaos Panigirtzoglou, analyst at JPMorgan, released data results dating back to 1952 and including 401 (k) retirement accounts. The analyst said that the appreciation in stock prices coupled with an increase in purchases were the main factors behind the increase in allocations.
The news comes just two weeks after FINRA announced that margin debt – the amount of money investors borrow from their brokers – hit another record high in March, surpassing $ 822 billion.
Rising interest in stock markets and the use of debt to invest in them comes against a backdrop of expanding retail traders.
New apps like Robinhood and Webull have taken the market by storm, adding millions of new investors and traders in recent years.
Robinhood grew so much that he was able to more than triple the revenue it derives from payment for the order flow in the first quarter of 2021.
The increase in active trading income came after Robinhood added some 3 million new members in the first quarter of 2020 alone at the height of the pandemic, by Bloomberg.
A new study of the University of Western Australia found that retail investor business activity increased during the pandemic as investors had more time and money to invest in e-commerce.
Robinhood and other trading apps have repeatedly occupied the top of Apple and Google’s app stores amid the meteoric rise in retail.
And while many market commentators applaud the inclusive movement, some have issued warnings.
Warren Buffett warned of the confident nature of Wall Street and the new breed of retail investors at Berkshire Hathaway’s annual shareholders meeting on Saturday.
“We were just as sure of ourselves, and Wall Street was, in 1989 as we are today. But the world can change in very, very dramatic ways,” said “the Oracle of Omaha.”