Many billionaire hedge fund managers did not see it coming.
When the stock market tanked in early 2020 as COVID-19 hit the U.S., hedge fund managers weren’t looking to buy. They thought stocks would go much lower.
Young retail investors were more optimistic. In March, stock in big companies was trading low and young people were buying.
Using retail stock apps like Robinhood, young investors saw bargains and invested stimulus money, savings or just their extra change into stocks.
But who would buy into Las Vegas casino and hotels when there was a global quarantine? Young people would. In March, if you had an extra $40, you could have bought one share of Wynn Resorts and more than doubled your money by now. You could have done even better on pharmaceutical stocks, especially the ones making vaccines. Those stock prices have tripled. One stock, Genius Brands, was selling at 33 cents in the first quarter. The stock reached over $10 per share recently.
According to Robinhood, three million new clients plunged their money into the market in 2020 during one of the worst first quarters on record. It created a ‘generational buying moment.’
Buying zero-commission stock by the share, or even a fraction of a share, is relatively new and millennials understood it immediately. The stock market has been democratized and everyone has access now.
