FAANGs' $800 billion rally has retail investors calling it quits

As Mom and Pop exit the big tech companies, many are buying cannabis companies

Apr 8, 2019 @ 4:03 pm

By Bloomberg News

After a three-month rally that's added more than $800 billion to the value of FAANG stocks, individual investors have decided it's time to cash out of the high-flying names.

Retail clients at brokerage TD Ameritrade increased their overall exposure to equity markets for a second consecutive month in March, yet they sold shares of Amazon, Facebook, Netflix and Apple. All four members of the so-called FAANG cohort — which also includes Google parent Alphabet — have gained at least 35% since stocks bottomed on Christmas Eve, which is 1½ times the S&P 500's return.

"Taking profits isn't the worst idea in the world," said Joe "JJ" Kinahan, chief market strategist at TD Ameritrade, noting that clients had been buyers of Amazon for eight straight months while also showing immense interest in Netflix in recent periods. "What it makes me wonder is, they were the momentum stocks, so where do we get our new momentum?"

It's possible the answer to that question is cannabis companies, according to Mr. Kinahan. While clients of TD Ameritrade shunned the FAANG names last month, many were buyers of Aurora Cannabis Inc. and CVS Health Corp., which recently announced that it will begin selling CBD-infused products at more than 800 of its stores. Millennial clients also scooped up shares of Canopy Growth Corp., according to a statement from TD Ameritrade.

(More: BlackRock invests in pot stock)

Retail investors were also large buyers of Tesla, NIO Inc., and AT&T in March. In addition to the FAANG stocks, retail investors were large sellers of Intel.

(More: Demand for growth stocks produces record inflows for ETF)

0
Comments

What do you think?

View comments

Most watched

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Latest news & opinion

SEC sets June 5 date for vote on Regulation Best Interest

Commission adds new item to agenda: Interpretation of broker guidance that qualifies as advice

House passes SECURE retirement bill with massive bipartisan support

The measure allows small employers to band together to offer plans and raises the RMD age. Another provision eases use of annuities in 401(k)s, which critics say goes too far

10 IBDs with the most annuity revenue

Here are the independent broker-dealers that brought in the most annuity revenue last year.

DOL sets date to propose new fiduciary rule

The regulation, expected in December, likely will be contoured to the SEC's new advice standards.

LPL expanding platform to include employee brokers

The largest IBD in the country has agreed to buy a small broker-dealer in Florida to kick off the new effort.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print