Americans Can't Get Enough of the Stock Market

[question everything]

Individual investors are holding more stocks than ever before as major indexes climb to fresh highs. They are also upping the ante by borrowing to magnify their bets or increasingly buying on small dips in the market.

Stockholdings among U.S. households increased to 41% of their total financial assets in April, the highest level on record. That is according to JPMorgan Chase & Co. and Federal Reserve data going back to 1952 that includes 401(k) retirement accounts. JPMorgan’s Nikolaos Panigirtzoglou, who analyzed the data, attributed the elevated allocations to appreciating share prices alongside stock purchases.

The enthusiasm for stocks comes as market volatility has been edging lower and the S&P 500 has hit 25 records this year, fueled by a stellar earnings season and the prospect of an economic recovery that is speedier than many predicted. Meanwhile, stimulus checks have fueled a record rise in household incomes, boosting spending and helping propel the recovery.

In the coming week, the monthly jobs report and earnings results from companies like Uber Technologies Inc. will provide clues about the strength of the recovery. Millions of new brokerage accounts were created during the Covid-19 pandemic and some investors who first tried their hands at stock or options trading over the past year have stuck around, adding to their investments. Financial advisers and money managers said their clients have grown more comfortable holding stocks as they witnessed the powerful rally over the past year, with some even questioning why they need bonds in their portfolios with yields still so low.

More..

https://www.wsj.com/articles/americans-cant-get-enough-of-the-stock-market-11619947800 (subscription)

[Hoyt]

1. Sounds like typical conditions right before a serious correction.

[PSPS]

3. Every time.

[bahboo]

4. ah yup....

[progree]

2. Here's one without the paywall

https://www.yahoo.com/news/u-households-increased-exposure-stocks-112907958.html

U.S. households have increased their exposure to stocks to the highest level on record, 5/3/21

U.S. households increased their exposure to stocks to 41% of their total financial assets in April, the highest level on record, WSJ reported Sunday, citing JPMorgan and Federal Reserve data that dates back to 1952.

Stock funds have seen net inflows for seven straight weeks, including a net $53.7 billion for the week ending March 17, an all-time high, according to data from the Investment Company Institute.

The big picture: Everyone and their mother is buying stocks, with flows underpinned by record borrowing from hedge funds and big banks, as well as a record level of margin debt being held by retail and institutional investors.

By mid-April, more money had flowed into stock funds this year than had been seen for the 12-year period of 2008-2020 (link to "2021 saw more inflows to stocks than the past 12 years combined" below)

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2021 saw more inflows to stocks than the past 12 years combined, Axios, 4/12/21
https://www.axios.com/stock-inflows-record-67b0f339-e2e0-47ff-a1ef-b1dc4700ca56.html?utm_medium=partner&utm_source=verizon&utm_content=edit&utm_campaign=subs-partner-vmg

Wow, in   3 1/2   months more than 12 years combined