U.S. retail investors are growing increasingly uneasy about a plummet in the stock market, asking for more investment advice, questioning whether to buy the dip and looking for safer havens, strategists and wealth advisors said.
Investor fears that Donald Trump’s tariffs will spark an economic downturn are driving a sell-off in equities, wiping out $4 trillion from the S&P 500’s peak last month, a stunning reversal for Wall Street that was once fired-up by president’s agenda.
That was feeding through to some individual investor behavior.
"We're seeing less and less dip buying than we've seen in a while, which tells us people are stepping back a little bit," said Joe Mazzola, head trading and derivatives strategist at Charles Schwab (SCHW.N).
The firm began seeing creeping risk aversion among retail investment clients in mid-February, he said, as those with larger portfolios became net sellers.
Andrew Graham, managing partner of Jackson Square Capital, which manages money for affluent and high-net worth individuals and families, said he has been building up cash in his client accounts to the highest in about five years, when the pandemic emerged as a new threat to the economy.
Graham, who has discretion over managing his clients' accounts, said cash is now "well over 10%" of most of his clients' portfolios. He is still selling stocks and building cash for his clients.
Clients are now being sure to show up for scheduled quarterly portfolio reviews with Graham and his team, he said.
"Worried or nervous clients translate into a busier calendar for us than usual," Graham said. What concerns him, however, is that many investors may still view the sell-off as a correction as opposed to a prolonged downturn.
Broadly, cash levels are high with assets at money market funds at a record according to data from Investment Company Institute. Cash levels marched steadily higher last week, setting a fresh record of $7.3 trillion, said Peter Crane of Crane Data, a firm that tracks market flows. That compares with about $7.17 trillion at the beginning of 2025, he said.
To be sure, not all retail investors are overly worried. According to data from Vanda Research, as of last week – the last period for which figures were available – retail investors remained net buyers of single stocks that have been market darlings, such as Palantir.
Even leveraged exchange-traded funds offering investors a multiple of any upside on underlying stocks or indexes have been popular, said Marco Iachini, senior vice president at Vanda.
ROTATION OR ROUT?
As wealth advisors steer clients away from the most overvalued corner of the market -- the stocks that also have an outsize weight in the Standard & Poor's 500 index -- they are drawing comfort from signs that not all parts of the market participated in Monday's rout to the same extent.
"It feels to me that there is a rotation underway," said Schwab's Mazzola, pointing to the fact that while investors are dumping technology and financial stocks, energy and utilities companies attracted new inflows. He also draws comfort from the advance/decline ratio.
Nate Garrison, chief investment officer of World Financial Advisors, said he had been reallocating client assets into value stocks since early this year.
These are lower-risk securities that offer stable if not spectacular growth, but also tend to trade at lower valuations than flashier, high-octane stocks like Nvidia (NVDA.O).
He has also added to positions in emerging markets and international equities.
"Value is still up this year, even as growth stocks are taking it on the chin."
That still does not mean Garrison is willing to urge his clients to buy the dip.
"This is getting rid of the froth," Garrison said. "We're urging caution when it comes to making any major allocation decisions. There are real risks in this market right now."
