MW Individual investors are shifting from 'buying dips' to 'selling rips' as they favor bonds and other defensive bets

By Joseph Adinolfi

Activity in March was down nearly 50% from the record pace of buying seen in January

Individual investors have been backing away from buying stocks over the past month.

Last April, retail investors in the U.S. stepped in to aggressively buy the post-"liberation day" dip in stocks while Wall Street professionals generally remained on the sidelines.

This year, the influential retail cohort is taking a much more cautious approach as the war in Iran upends markets around the world.

Following a record-breaking frenzy of activity earlier this year, retail investors' interest in trading stocks appears to have cooled as markets have turned rocky over the past month or so, according to J.P. Morgan strategist Arun Jain. Retail buying activity in March was down nearly 50% from the record pace seen in January.

Instead of buying dips like they have done in the past, individual investors appear to have shifted to "selling rips," Jain said. When stocks see strong gains, individual investors see this as an opportunity to sell and turn a quick profit.

At the same time, individual investors have started to favor defensive bets like bonds. Exchange-traded funds holding inflation-protected securities have seen a recent spike in interest, the J.P. Morgan team said. Retail purchases of the Vanguard Short-Term Inflation-Protected Securities Index Fund VTIP, an ETF that invests in inflation-protected Treasury notes, have been notably pronounced.

See: Retail investors are showing signs of 'persistent' fatigue as Iran risks mount, says J.P. Morgan

Individual investors' increasing wariness toward risk was particularly evident on Wednesday, the J.P. Morgan team said. The S&P 500 SPX tallying its best session in 10 months wasn't enough to entice retail buyers back into stocks. Instead, they favored fixed-income ETFs over more "risk-on" alternatives.

Instead of single stocks, the retail crowd has recently been favoring so-called inverse ETFs - that is, funds that allow an investor to benefit when the price of an underlying stock or index falls. For example, the retail crowd piled into the ProShares UltraPro Short QQQ ETF SQQQ, which rises when the Nasdaq-100 NDX falls.

Through Tuesday, individual investors continued to sell individual stocks on a net basis even as the market rebounded early last week. Meanwhile, ETFs saw "moderate inflows," with investors favoring more defensive assets.

Last week, retail selling of big winners like energy stocks and memory stocks picked up - Micron Technology $(MU)$ and Sandisk $(SNDK)$, two popular memory names, saw the heaviest selling.

But individual investors were sellers across most sectors last week, with consumer staples the lone exception.

While the retail crowd continued to pour money into longtime favorites like Microsoft $(MSFT)$, Nvidia (NVDA) and Tesla $(TSLA)$, positioning in tech stocks excluding members of the "Magnificent Seven" group of megacap tech stocks fell to its lowest level in six months.

Retail investors have also become less active in the options market, according to J.P. Morgan. The share of overall activity that the team attributed to the retail crowd has stabilized after retreating from a high.

-Joseph Adinolfi

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April 06, 2026 09:33 ET (13:33 GMT)

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