“How do you deal with falling prices in the market?” This was the question asked to 890 investors in the monthly IEX survey. As prices fluctuate, investors face the difficult task of protecting and growing their portfolios, regardless of market conditions.
How do investors do it? In which sectors are they most cautious and which are the five stocks that are being sold off most often this month? We will check it for you.
Most choose to purchase (extra) shares.
The majority of investors (74.2%) see the current stock market situation as an opportunity to expand their stock portfolio. These optimists choose to buy additional shares. A smaller but no less strategic group (4.4%) choose to buy put options to take advantage of future price declines.
While some are clinging to traditional assets like gold and silver, the rest are exploring the possibilities of so-called inverse ETFs that take advantage of market declines. It seems that this tool still needs to be found by a larger group of investors.
Possibility of inverse ETFs
Inverse ETFs are exchange-traded funds designed to return the inverse of an index’s daily return – with or without leverage. In other words, when the index loses value, the fund gains value – and conversely, when the index rises, the fund loses.
With a product like this, it’s natural to want to be in a sector that has little short-term growth potential. That’s why we asked investors which sectors they are cautious about. Answers vary.
Which sector are you most cautious about?
- Technology: 18.8%
- Finance: 14.5%
- Energy (oil and gas): 9%
- Chemicals/pharmaceuticals: 15.9%
- Defense/Cyber: 2.2%
- Communications: 12.5%
- Consumer goods: 16.1%
- Raw materials: 9.3%
- Other: 1.7%
Which stocks were shorted the most in May?
Finally, investors say what stocks to sell in May. A clear top 5 appears from all responses. It’s number five Randstad. Investors expect economic growth to slow. They also see that more and more companies are focusing on permanent employees, which reduces confidence in the temporary employment sector.
It’s at number four PhillipsDespite the big jump in prices recently. Investors do not seem reassured yet: “The settlement does not mean the end of all fears.” This is not structurally correct, there is a lot of uncertainty due to non-transparent management and who knows, maybe more claims will follow later.
Third place goes to meal deliverers Just eat takeaway. Investors do not have much confidence in the business model. Competition is also reason enough for investors to sell shares this month. Moreover, investors in JET do not support management and see growth prospects as weak.
Bessie He gets the silver medal. Investors believe that the stock has risen too quickly, is valued too high, and is therefore too expensive. Investors will also have doubts about Besi’s order flow next quarter, which was disappointing last quarter.
And then number 1: Aden. Investors consider Adyen stock to be the most overvalued stock in Damrak. “The price trend is incomprehensible based on the numbers. Sentiment is already starting to shift a little, which is also due to increased margin pressure. This stake is expensive and has no choice but to decline next month.”