0
51
The October slump in the Nasdaq—which saw the index end the month roughly 8% below its October 6 peak, with over $2 trillion in market capitalization evaporating from the Nasdaq 100—highlights one of the most challenging periods for tech investors this year. The market’s instinctive reaction followed the old adage: "buy the dip." However, the assumption that every red screen represents a gift from institutional players has collapsed in the face of asset prices inflated by speculation surrounding artificial intelligence.
Retail Participation: A 2026 working paper by Xiao Yin (University College London) and Dongchen Zou (Indiana University)—covering approximately 80% of actual U.S. retail trading volume—reveals that retail buying surges significantly following price drops, yet remains largely unchanged after price gains.
Scale of Individual Flows: It is estimated that individual investors currently account for about one-third of total U.S. stock trading volume—roughly triple their share from a decade ago.
The End of an Anomaly: "Buying the dip" has shifted from being a contrarian behavior—acting against the prevailing market trend—to becoming an intrinsic feature of the market structure itself. Years of abundant liquidity following the financial crisis, combined with zero-interest-rate policies, conditioned investors to believe that any market correction was merely a springboard toward inevitable new highs.
Read more at ExpertFX School: https://expertfxschool.com/en/news/31820-evaporation-of-more-than-2-trillion-in-the-nasdaq-100-index/
