Retail investors see FTSE 100 coronavirus sell-off as buying opportunity
Investors sit tight during crisis
Almost three-quarters of retail investors believe the FTSE 100's precipitous coronavirus-related fall represents "a strong investment opportunity", with the majority sitting tight during the sell-off and taking no action with their portfolios, according to a survey by ETF provider GraniteShares.
The findings show 78% of retail investors decided not to make changes to their portfolios, despite the Covid-19 crisis leading to a heavy sell-off in risk assets during late February and early March. Stockmarkets have since recovered, but volatility is expected to continue to run higher.
Almost one in ten (8%) said they had cashed in some of their investments, with 22% of those selling out of more than half of their portfolio.
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Just over one in ten (11%) have put more money to work in the stockmarket as they believe it represents a long-term buying opportunity, while 6% have sold some stocks in order to buy others.
For UK equities, 70% of investors believe the FTSE 100, which is still down 22% in 2020, represents a strong investment opportunity due to many of the blue chips being undervalued.
Further, the research showed that 4% of retail investors made a profit during the market sell-off by shorting stocks.
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Founder and CEO of GraniteShares Will Rhind said the research showed that while some investors responded to recent volatility in markets by adjusting portfolios, "most are just sitting on their hands through this roller-coaster ride of volatility".
"With advances in asset management and fintech, investors now have more tools to take control of their finances, and sophisticated investors can now more easily hedge against falls and boost returns from any recovery," Rhind noted.
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