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How Retail Investors Outplayed Wall Street in April |
Retail investors crushed it in April 2025 — buying when hedge funds bailed and turning the chaos into gains. Here's what went down… |
April 2025 will go down as one of the wildest trading months in stock market history. |
Global markets got absolutely rocked by President Trump's "Liberation Day" announcement… |
I'll never forget watching the press conference live as the markets initially ticked up. Investors seemed relieved by what they saw. |
But when the President held up his "Reciprocal Tariffs" placard, it became clear these tariffs were going to be way bigger than expected. |
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What followed was the biggest market nosedive since 2020. |
The markets continued bleeding until Trump issued a 90-day pause on the "reciprocal tariffs," which led to the biggest single-day rally in the S&P 500 since 2008. |
And now, thanks also to the détente in the trade war with China, CNN reports that the S&P 500 "has now fully erased the year's losses and gained nearly $8 trillion in market value since its April 8 lows." |
The portrait that has emerged since then is one of retail investors "buying the dip" as institutional investors for once have been left holding the bag. |
On April 10, CNBC reported: |
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It noted that "institutional investors ran for the hills" during the week after Liberation Day. "But data from market insights firm Vanda Research, a trusted authority on retail investor trends, showed mom-and-pop traders… doing the exact opposite." |
On April 3, as the S&P 500 tanked nearly 5%, "self-directed retail investors pushed more than $3 billion into U.S. stocks on balance. … the largest daily net haul on record, per Vanda data going back to 2014." |
In total, between April 3 and April 8, "retail traders sent around $8.8 billion in net inflows to the U.S. stock market." |
They bought in on the way up too… |
Bloomberg reported on J.P. Morgan data that showed retail traders "plowed a net $50 billion into US stocks" since April 8. |
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Meanwhile, big money panicked. |
There was some speculation that foreign investors were the ones driving the flight from U.S. securities, but J.P. Morgan put that to rest, according to MarketWatch. |
Some choice excerpts: |
"The recent market sell-off has likely been driven by hedge funds reducing exposure to stocks and not a flight out of U.S. assets by foreign investors, according to JPMorgan. |
"And when equities dived, it was retail investors who stepped in to pick up perceived bargains, the bank said." |
And |
"Instead, JPMorgan said, much of the selling of U.S. equities in 2025 has been driven by equity-focused hedge funds, both discretionary and those with a bent for algorithmic trading, who have dumped about $750 billion of stocks year-to-date. |
" 'Another key driver has been momentum-driven hedge funds… . We estimate their sales came to around $450 billion,' said JPMorgan." [emphasis added] |
Now that the S&P 500 is in positive territory for the year, I'd like to play those hedge funds the world's smallest violin 🎻. |
Retail investors are still optimistic, but some finance big wigs are throwing in with the bears: |
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We'll see if they're right! But for now, score one for the little guys 👍🏻. |
Here are some lessons moving forward: |
Watch for more tariff escalation rhetoric — but don't panic.
Keep a close eye on U.S.-centric small caps; they're moving on this stuff before anyone else.
Stay tactical, not emotional. Focus on setups, not politics.
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And most important: Don't let Wall Street convince you you're not supposed to win. |
Because in April 2025, retail investors didn't just survive the storm — they navigated it better than the pros. |
To Your Success, |
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