Retail investors enjoyed another great year by sticking with proven large-cap tech names that delivered big gains and promising advances in artificial intelligence.
Vanda research it is estimated that the year will end with about $265 billion in net new inflows into US markets by individual retail investors. While that’s $25 billion less than the previous three-year average, based on data from Vanda Research, it’s still within the post-COVID-19 range — indicating a healthy appetite for the average investor to engage with the markets.
The six corporate tickers with the biggest inflows from retail investors were a who’s who of tech momentum: AMD (AMD), Nvidia (NVDA), apple (AAPL), Palantir (PLTR), Tesla (TSLA), and Amazon (AMZN). These five names generated $67.7 billion in total retail sales this year. Nvidia has overtaken Tesla as the most popular stock among retail investors, at least judging by inflows.
Nvidia pulled in $29.8 billion in net retail sales this year, according to Vanda Research, up from $11.4 billion last year. Tesla’s retail revenue fell to $14.7 billion from $48 billion in 2023.
However, Tesla still outperformed Nvidia as the leading portion of retail investors’ portfolios — representing an average portfolio weight of 10.58% compared to 10.33% for Nvidia.
The other top four trades were more index-based trades focused on popular themes such as AI: Shares Direxion Daily Semiconductor Bull 3X (SOXL), Invesco QQQ Trust (QQQ), ProShares UltraPro QQQ (QQQ), and the SPDR S&P 500 (SPY).
“2024 has been an eventful year for markets,” said Vanda Research Senior Vice President Marco Iachini. “For the average retail investor, it’s been another great year of portfolio performance. Loyalty to tech names has paid off.”
Indeed, that technological loyalty has paid off.
Vanda Research estimates that the average retail portfolio is up 40.74% this year, the second-highest performance since 2014. Only 2023’s performance of 41.94% has been better over this 10-year period.
On a flow-adjusted basis, Vanda Research noted that this would be the second time retail investors beat the S&P 500 (^GSPC) in consecutive calendar years and the first time since 2014 that the non-institutional crowd beat the Nasdaq Composite (^IXIC).
One can only guess whether the good times for small investors will continue in 2025.
On the positive side, the incoming Trump administration has promised business policies such as cutting government spending through Department of Government Effectiveness (DOGE) under Elon Musk and the extension of tax cuts.
