The Main Street Faces of the Fierce Rebound in Stocks

Back on March 23, it seemed like stocks would never stop falling. Congress was struggling to pass stimulus, coronavirus cases were climbing, futures were pinned to their bottommost tick and $10 trillion in value had vanished.

Meanwhile in Northern Virginia, Nicole Kelleher was opening her very first brokerage account. Little did she know, the S&P 500 was about to surge 30%.

The romance novel writer and administrative aide at George Mason University spread $5,000 across Peloton Interactive Inc., Fitbit Inc., Trivago and Dropbox Inc., among others, on the Robinhood Financial app. Her husband, a restaurant executive, told her she needed some real estate. So Kelleher bought shares of MFA Financial Inc. Five weeks later, the portfolio is up almost 12%.

“What’s happening right now is that fear has turned to greed for the retail investor. Nobody wants to be left behind,” said Jason Thomas, chief economist at AssetMark. “Have they been part of what has driven the market in the past month? I think so.”

Sector-focused equity exchange-traded funds have taken in more than $16 billion in April, the most for any month since 2016, Bloomberg Intelligence data show. So far in 2020, stock ETFs have taken in $60 billion altogether.

But even in the wake of increased interest, retail traders aren’t completely letting their guards down. A Charles Schwab survey of 500 active traders found 60% expect the stock market to remain in a bear market through the end of the year. That would mean they believe the rally they’re currently enjoying is likely to fade, demarcating the comeback as a bear market bounce.

Kelleher is staying vigilant to that risk. She monitors her portfolio daily and even used videos on YouTube to learn how to create her very own stock-watch list. She regrets not buying Square Inc., and has her eye on United Natural Foods Inc., among others. Still, with the coronavirus not yet contained, she worries.

“I would only say that I am being very conservative in the amount that I am investing because of not knowing what is next,” she said. “It’s coming directly from savings, and I just want to make sure we are covered in case everything closes down.”

— With assistance by Vildana Hajric, and Claire Ballentine

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