Why retail investors are excited and scared about market volatility
Welcome back! With the recent Meta layoffs, there’s lots of chatter about “underperformers.” An ex-VP of HR at Microsoft offered some tips for avoiding the label.
In today’s big story, retail traders told us how they’re navigating the volatile market and why some of them love meme coins.
What’s on deck
Markets: Our annual list of the 20 M&A bankers who closed the most deals last year.
Tech: The former Meta employees labeled as low performers are fighting back.
Business: The USAID funding freeze has left thousands of Americans jobless.
But first, mom-and-pop traders are back.
The big story
Retail’s market momentum
A pro-business, unpredictable president with stocks near all-time highs has retail investors both excited and scared about the future.
Some see the market volatility driven by the Trump administration as a way to mint big returns. Others view it as a reason to be cautious about where they put their money.
B-17 spoke to investors on both sides about how they’re navigating what looks to be another turbulent market period.
Retail interest is definitely up, with new JPMorgan data showing a record amount of money coming into the market following President Donald Trump’s inauguration.
Some new names outside the Magnificent 7 are also making waves. Palantir and its lively CEO Alex Karp and Robinhood, a favorite app among retail traders, have become retail darlings this year thanks to their performance.
Of course, amateur investors’ increased interest in the market could be a red flag. As the old saying goes, when the shoeshiners give stock tips, it’s time to get out of the market.
Some on Wall Street certainly seem nervous about the market’s complacency. A looming trade war, the government’s growing deficit, and questions about AI spending have plenty of investors on edge.
Some retail traders are chasing even more volatility.
Meme coins, crypto’s version of penny stocks, are getting lots of attention. The tokens are often based on viral jokes or internet characters, lack any real fundamentals, and are known to skyrocket and plummet in minutes. (What could possibly go wrong?)
Despite their less-than-stellar reputation — critics like to call them “sh*tcoins” — plenty of traders are willing to take the risk, hoping they can hit it big.
B-17 spoke to three meme coin traders about their rationale for investing in such a volatile asset. They pushed back on the idea that they’re reckless or impulsive, although one trader’s strategy is to hold his position for less than a minute.
One investor, Glauber Contessoto, has a multi-million-dollar stake in dogecoin (the one that inspired Elon Musk’s cost-cutting group) that he’s holding onto for the long run.
3 things in markets
- The top 20 bankers behind last year’s M&A rebound. With the help of MergerLinks, we’re back with our annual edition of “The Rainmakers.” It’s a list of the investment bankers with the highest overall transaction volumes in the US over the past year. JPMorgan’s Anu Aiyengar became the first woman to top the list.
- Stop asking your financial advisor about bitcoin. A recent survey of 250 financial advisors found the majority (62%) don’t think recommending bitcoin aligns with their fiduciary responsibility. It’s tough to ignore an asset class that’s performed so well recently, but advisors said its volatility and speculative nature make it a hard sell. “We can’t be rolling the dice. If that’s all we’re going to do, then they don’t need us. They can go to a casino,” Kashif A. Ahmed, a certified financial planner, told B-17.
- These older millionaires don’t want to retire. Americans are working for longer, and that includes the wealthy. While retirement may seem like a rite of passage, some well-off, older people told B-17 they’re still working to keep their minds sharp.
3 things in tech
- Laid-off Meta workers are clapping back. Last week, Meta cut some 4,000 employees in an effort to eliminate what the company dubbed “low performers” from its workforce. Instead of staying quiet, the former employees quickly took to LinkedIn to counter Mark Zuckerberg’s assessment of their work. Their defiant posts are new for the professional world, but it’s enabling them to assert their own value in the marketplace.
- After a messy boardroom battle, OpenWeb’s founder is back. Nadav Shoval, the founder who was ousted as CEO of OpenWeb by its board, has returned to the adtech company in an advisor role, B-17 exclusively reports. Shoval, who sued OpenWeb and some of its board members, said they had resolved their differences.
- Aging in the age of apps. The tech industry is full of young, fit, and busy people making products for even younger, fitter, and busier people. Getting older, however, inevitably brings us all a bit of mental inflexibility and physical limitation — and the industry’s constant app updates and fancy new gadgets aren’t made for any of that. So, what will happen when an unprecedented number of us are old?
3 things in business
- Five years of WFH has meant people forget how to act in the office. The rise of remote work since the pandemic has shaken up our habits, making hourlong baths, rarer deodorant use, and mildly terrifying skincare routines feel permissible during the workday. While WFH offers us the flexibility to embrace weird quirks in private, it also complicates the return-to-office transition.
- The USAID spending freeze is being felt at home. The freeze on foreign aid was meant to put “American interests” first, but it has left at least 12,700 Americans jobless. North Carolina, which is home to organizations that received more than $2.2 billion from USAID, has been hit particularly hard.
- Employee computer surveillance is up, and bosses are keeping tabs. Demand for employee monitoring software went up 54% from March 2020 to June 2023, one study found. From tracking keystrokes to taking screenshots, bosses have more productivity data than ever — and it’s becoming vital as cutting costs and reducing head count become a workplace trend.
