It’s a standard movie line from long ago. In a moment of potential danger, someone will say, quietly, “Don’t make any sudden moves.”
Such is the advice many investors have received from their advisor in regard to the large dip in stock market prices as a result of the actions taken to curb the coronavirus. As the stock market regains some regular movement through April, investors are still watching with caution to determine the best path to take with their equity-based investments.
But that is not true of all investors.
According to the April edition of Spectrem’s special three-month report – Corona Crash: What Advisors Should Be Saying To Investors Now – there are investors who are moving in and out of stocks as the market wavers, and the numbers are increasing.
From March to April, the percentage of investors who have sold equities rose from 9 percent to 15 percent, and in that same time period, those who have bought equities is higher, from 17 percent to 21 percent. Investors are more likely to be trying to take advantage of this sudden downturn in the market rather than getting out with stock prices so low.
The Corona report contains several different points about the stock market and how investors are reacting, including their opinions about the advice they are getting from their advisors.
While a majority of investors decided not to try to play the market during the first few months of the pandemic and its economic impact, the percentage is decreasing. In March, 74 percent made no changes to their portfolio, while in April, that percentage dropped to 65 percent.
The wealthier the investor, the more likely he or she has bought or sold equities during this time. More than 70 percent of investors with a net worth under $3 million have taken no actions in relation to their equity investments, while more than one-third of those with a net worth over $10 million have been making trades.
Corona Crash: What Advisors Should Be Saying To Investors Now is available here. A third month of the report will be issued in mid-May.
Keywords: corona crash, investors, advisors, Spectrem, equities, investing, caution