The stock market is surging, and the spirit of exuberance is back. Fueled by a surge in artificial intelligence stocks like Nvidia, major indexes are hitting record highs, and even Bitcoin is threatening new peaks. While financial advisors urge caution and diversification, many individual investors are diving headfirst into the rally, each with their own unique strategy.
Jordan Buchanan, a 35-year-old Navy officer, opted to invest his maturing certificate of deposit in stocks rather than locking into a 5% interest rate. He believes growth stocks will outperform as the Federal Reserve cuts rates, and has seen his portfolio climb 17% this year, exceeding the tech-heavy Nasdaq's gains. Buchanan's decision reflects a broader trend, with Charles Schwab reporting the highest level of bullishness among everyday investors since their surveys began.
Zachary Esters, a 33-year-old artist, focuses on undervalued stocks. He recently bought shares in companies like Arbor Realty Trust and Barrick Gold, which have fallen this year but offer attractive dividend yields. Esters acknowledges the importance of diversification and plans to add more value stocks to his portfolio, which also includes established companies like Alphabet and Adobe.
Richard Stofan, a full-time day trader, is embracing a more speculative approach. He has reallocated a portion of his tech portfolio into small-cap ETFs, biotechnology stocks, and even Cathie Wood's high-risk ARK Innovation ETF. Stofan has also dabbled in cryptocurrencies, buying shares in miners like Riot Platforms, emboldened by Bitcoin's near-record price. While this strategy offers potentially higher returns, it also carries greater risk, especially if the Fed delays or reduces rate cuts less aggressively than expected.
Chase Speegle, another day trader, has adopted a more cautious approach after losing significant gains during the meme-stock frenzy of 2021. He now prioritizes cutting losses quickly and adding to winning positions to maximize his potential. Speegle believes the current bull market makes it easier to follow bullish trends, but acknowledges the inherent volatility of the market.
As Ayako Yoshioka, a senior portfolio manager, emphasizes, investors must find their risk tolerance. "Everybody loves the upside, everybody hates the downside, but you can't avoid one without the other," she says. "It's really about the kind of rollercoaster ride you're willing to take. How smooth do you want the ride to be?"
The future of the bull market remains uncertain, but one thing is clear: individual investors are actively participating, employing diverse strategies based on their risk tolerance and investment goals.
