According to a new report published by trading and investing platform Capital.com, global retail client participation in commodities across the broker’s trading platform climbed by 85% in the first three months of the year. According to the report, commodities had the biggest influx of trades in the first two weeks after the invasion of Ukraine began on 24 February.
Over the same period, DIY investors showed significant interest in higher-risk tech stocks with the Nasdaq emerging as the number one most-traded market among investors.
Trading volumes climbed to new record
Trading volume across all assets climbed to a new record despite the climate of heightened risk, up by 33% from the previous three months. These findings suggest that retail investors responded nimbly to world events in the first quarter of 2022.
“The data from our research shows that DIY investors generally oscillated between ‘buying the dip’ in tech stocks, chasing momentum in energy markets or seeking refuge in gold and dollars in Q1,” said Capital.com Chief Analyst, David Jones. “Investors and traders came into 2022 concerned about the implication that higher inflation would have on world markets. But those worries took a back seat in February following the Russian invasion, and attention switched to chasing the momentum in commodity markets such as oil – and mitigating the broader market risk by buying gold.”
The insights were released in Capital.com’s proprietary report — Pulse — which captures global trading patterns across 6,000 instruments. The Q1 2022 Pulse report tracked the retail trading behaviour of platform users between 1 Jan 2021 and 31 March 2022. Capital.com has over 4 million platform users across the world.
Traders swapped meme stocks for tech shares
The Pulse report further revealed that so-called meme stocks such as GameStop and AMC Entertainment were less attractive to retail investors in the first quarter of 2022. By contrast, companies with a stronger focus on Cloud-based technology activity and software – such as Autodesk, Meta Platforms, Microsoft, Matterport, Cloudflare, Roblox, Shopify and Unity Technologies – drew considerable interest. Investor participation in these tech stocks rose 26% over the quarter.
“Markets were largely down in January, and tech was the big casualty amid bubble fears and stocks wildly detached from price/earnings ratios,” Jones explained. “The plunge accelerated following the Russian invasion – at its worst in mid March the Nasdaq 100 was down 20% for the year to date. But that trend ended. The last two weeks of March saw a significant recovery, and today we see Nasdaq stocks back at January’s levels. The question our traders may be asking for the next quarter is: Could this be merely the ‘dead cat bounce’?”