Stimulus cheques have buoyed America’s stockmarket

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Stimulus cheques have buoyed America’s stockmarket
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  • 📰 TheEconomist
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Research shows that from January 2020 to April 2021 an equally weighted portfolio of stocks in which retail investors were most active gained nearly 150%, against 38% for the overall market

Save time by listening to our audio articles as you multitaskMany retail investors performed much better. Tales of newly minted meme-stock millionaires who got rich backing GameStop, a video-game retailer, prompted some observers to reconsider the skills of retail investors. Might they have some strategic advantage over the pros?

To discover the direct effect of the stimulus, the researchers first needed to find the precise dates on which the payments were received. As the poor spend a bigger share of their incomes than the rich, they expected the stimulus to cause large surges in spending in poor areas. Sure enough, the authors found distinct spikes following each of the three rounds of cheques.

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