Retail investors thought they were outsmarting Wall Street this spring with a record-setting dip-buy. But the so-called “smart money” may be getting the last laugh by dumping stocks into that very rally.
“Professional investors sold $4.2 billion in U.S. equities last week,” macro research outlet Global Markets Investor wrote, citing Bank of America data.
“They take the opportunity to dump stocks as the market bounces,” the note added, referencing hedge funds, institutions, and seasoned traders often referred to as "smart money."
🚨Institutional investors have been selling US stocks almost every week in 2025:
undefined Global Markets Investor (@GlobalMktObserv) June 11, 2025
Professional investors sold $4.2 BILLION in US equities last week.
The 4-week average of selling reached $2.0 billion.
They take the opportunity to dump stocks as the market bounces.
Smart money? pic.twitter.com/GeM2TFn26u
The selling spree comes even as retail traders — sometimes dubbed the “dumb money” — have aggressively chased the rebound since President Trump’s April 2 “Liberation Day” tariff speech.
That speech kicked off a massive surge in dip-buying, with retail inflows into U.S. stocks hitting an all-time high.
In the first five months of 2025, everyday investors poured a record $150 billion into U.S. equities. “Retail investors have never bought so many U.S. stocks, not even close,” Global Markets Investor noted.
Ironically, that buying has paid off, at least for now. Retail traders have outperformed institutional players since April.
But smart-money sellers may ultimately be proven right if the rally fizzles, and growing economic and policy risks suggest they just might.
A “confluence of challenges” ahead
Despite outperforming in recent months, dip-buyers may want to check the scoreboard. The S&P 500 is still up just 2% year to date.
That 20% rebound since early April has only erased prior bear market losses instead of being the beginning of a new bull run.
Strategists at Charles Schwab warned this week that a “confluence of challenges” — including sticky inflation, fresh tariffs, and rising fiscal pressure — could make the second half of 2025 far more volatile.
Trump’s tariff plan has already “contributed to stagflation, a deceleration in economic growth, and an expected acceleration in net inflation,” Schwab’s Liz Ann Sonders and Kevin Gordon wrote.
They advised investors to “keep the seatbelts on” as we approach a turbulent second half of the year.
“With stocks nearing all-time highs as we put this report to bed,” they added, “the bar is relatively high for the market [to outperform] heading into the second half of the year.”
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