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“Tante Emma investors”: Goldman Sachs: Wall Street professionals could lag behind private investors | message


• Private investors are increasingly investing money on the stock exchange
• “Tante Emma investors” achieve more returns than professionals
• Cyclical and cyclically sensitive stocks particularly popular

In the recent past, private investors have increasingly invested their money on the stock exchange. The market crash caused by the corona virus pandemic – despite concerns about the future of the economy and the associated high volatility on the stock markets in recent weeks – has also led to cheaper entry opportunities for investors.

Private investors outperform professionals

Goldman Sachs data, as MarketWatch reports, showed that a basket of stocks increasingly bought by retail investors since the big Corona crash in March returned 61 percent. Another portfolio with investments from investment funds and hedge funds – including the well-known analyst David Kostin – was able to achieve a return of 45 percent. According to data from Goldman Sachs, Wall Street professionals are 16 percent behind private, so-called “mom and pop investors” in this case – private investors have outperformed professional investors.

Cyclical and cyclically sensitive stocks in demand

According to the Goldman analysts, much of the outperformance by private investors was recorded in mid-May. At this time, there was increasing positive news about the corona pandemic: the restrictions imposed had an effect, many countries that had been hit hard seemed to be in control of the situation again, and there was hope that bad economic consequences would be cushioned and rapid economic recovery could come. Cyclical stocks – including companies with a smaller market capitalization – and economically sensitive stocks, from which investors expected positive developments due to the better news situation, were particularly in demand at this time. These stocks “were quickly adopted by value-oriented retail investors and now make up a large part of our retail basket,” MarketWatch reports the Goldman researchers.

These shares were bought by private investors

According to Goldman Sachs, the titles that private investors bought included papers from Penn National Gaming, Moderna, Tesla, MGM Resorts International, Royal Caribbean Cruises, Marathon Oil, Snap, GoPro, Norwegian Cruise Line, Groupon, NVIDIA, Ford Motor , General Motors, Facebook and Apple.

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