Despite the COVID-19 steep coronavirus-induced correction across U.S. markets since late February, individual investors are taking to heart Warren Buffett’s famous axiom, “Be fearful when others are greedy, and be greedy when others are fearful” and calmly buying stocks during the coronavirus panic.
According to trading data from Fidelity Investments and Vanguard, two of the biggest brokers serving retail investors, their clients are showing no signs of panic and adding stocks to their portfolios in the midst of a steep market sell-off that has brought the S&P 500 down close to 20% from its highs of February 19th…
The majority of clients at Vanguard, which manages over $5.6 trillion, moved money into equities as opposed to fixed income, including cash, according to a Charles Kurtz, a spokesperson for the firm… Fidelity Investments, which manages $2.4 trillion in assets, also reported a similar surge in stock buying by its customers. Fidelity saw an equity buy-to-sell ratio of 2.11 to 1 on Monday, March 9th, even though U.S. markets plunged over 7%.
Investors at Fidelity, which publishes its most actively traded2 stocks and ETFs each trading session, have been loading up on some of the most popular stocks like Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), and Disney (DIS), as these mega-caps have seen their shares tumble off of record highs.
MacDailyNews Take: While this is likely to get worse before it gets better, panicked selling will only lose you money, not make it. Of course, it’s nearly impossible to call a bottom, but getting in at a nice low price while “others are fearful” might look pretty good in your portfolio a few quarters out. Hopefully, Apple is executing beaucoup buybacks at discount prices during this period, just as others are calmly buying stocks during the coronavirus panic.
We’re having a panic-induced deep discount sale on Apple just ahead of a multi-year 5G super cycle. It makes a lot of sense to consider buying Apple stock on the coronavirus pullback. — MacDailyNews, February 25, 2020
Be fearful when others are greedy. Be greedy when others are fearful. — Warren Buffett