Retail Investors Are Buying the Dip In Hopes The Tariff Tiff Will Be Short-Lived

President Donald Trump once famously said, “We’re gonna win so much you might even get tired of winning.” We doubt his supporters thought he was talking about the stock market — which has been in freefall in the early oughts of his presidency. Only, maybe the worst hadn’t come to pass. On Thursday, the S&P 500 saw its 23rd largest decline this century — and convinced they’ve seen this movie before, retail investors went bargain shopping.

• According to FT, retail investors ended last Thursday with $4.7B of net buying, marking one of the largest buying sprees by individual traders over the past decade.
• Almost every major sector was toiled by the tariffs, offering investors opportunities to pick up stocks that they like at cheaper prices.

But is it really a bargain? As if Thursday wasn’t bad enough, the declines continued on Friday — extending the S&P 500’s two-day loss to 10.1%. And institutions have been looking for the exits, unwilling to wait around for policy change (or to count their losses in the fallout). That means retail investors buying here will need a high pain tolerance, as analysts cut their S&P 500 targets and raise recession odds. Still, a little short-term planning and long-term thinking could make this pullback an opportunity — especially if Trump changes his mind or brokers deals with affected countries. Even then, many countries are standing to retaliate against the US — which means a quick recovery is, by no means, a given.