The exuberance of private investors on the stock market is unlikely to slow down in the foreseeable future.
Households are expected to buy $ 400 billion net worth of U.S. stocks this year, Goldman Sachs strategists said in a recent release, a level that will mark the $ 367 billion that the Group bought in 2020.
“High cash holdings and continued retail exposure to the equity markets should drive demand for household stocks,” said David J. Kostin, chief strategist for US equities, and a team of analysts in a statement released on Friday. “The tradeoff that households face between stocks and other asset classes will favor stocks through year-end in the face of anemic money market and credit yields.”
In the first quarter of this year, households with net purchases of 172 billion US dollars were the largest source of stock demand. Goldman estimates that households currently invest 44% of their wealth in stocks, slightly below the all-time high of 46% reached during the dot-com era in 2000.
After taking a breather at the beginning of spring, individual investors have recently returned to the US stock market. On its Friday memo, Goldman said a basket of stocks preferred by retail investors had overtaken the S&P 500 by 3 percentage points this month.
Still, Goldman expects companies to be the biggest source of stock demand for the remainder of 2021 as “buybacks are expected to accelerate and emissions to slow from their highs”. [first quarter] Levels. “
