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Illustration: Aïda Amer/Axios

As traders around the globe have frantically unloaded positions in recent weeks, so-called mom and pop retail investors have kept level heads and not sold out of stocks.

What they're saying: In fact, "the typical trader is buying equities on the dips," passive investment firm Vanguard notes in a research paper, adding that "older, wealthier traders are moving modestly to fixed income."

Quick take: Jeffrey Kleintop, chief global investment strategist at Charles Schwab, points out that through the end of last week, passive equity ETFs had seen a net $20 billion in inflows.

  • "Obviously selling is big among traders, institutions, computer algorithms ... but the one stabilizing factor in this market has been individual investors," he tells Axios.
  • "That has never been true before, and it’s a very unique aspect of this downturn."

What's happening: The contrast between professional and amateur investors could not be more stark. As the pros sold out of risky assets like stocks and oil and even safe havens like gold and Treasury bonds, amateur traders were "maintaining a long-term perspective despite the market turmoil," Vanguard said.

  • Google Trends data show that throughout the month of March, searches for “how to buy stocks” and "Dow Jones" are soaring.

On the other hand, money market funds, used ostensibly as savings accounts and cash positioning by money managers, saw record inflows each of the past two weeks, rising to the highest level of holdings on record.

Why it matters: Retail traders "buying the dips" is normally a contrarian signal, meaning that it's time to sell.

  • Over the past 30 years, like clockwork, retail investors have sold as the market hit its floor and a recovery was underway, and bought when the market was at or near its zenith and began to fall.

Watch this space: Thus far, "U.S. equities continue to run in lockstep with the day-to-day moves of late September/October 2008," DataTrek Research co-founder Nicholas Colas says in a note.

  • After October 2008, stocks fell for another four months, piling up 40% of losses before the recently ended bull market began in March 2009.

The bottom line: The key to finding a bottom is a peak in confirmed coronavirus cases and the beginning of a recovery from the pandemic, Kleintop says.

  • "Until we get to that peak in new virus cases on a global scale, we just don’t know how deep the downturn is going to be."

Go deeper

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Why it matters: The highly-complex structures of capitalism are built from the mostly base motivations of individuals chasing money. That's been condemned and celebrated in equal measure — but has also largely been accepted.

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Senate Republicans formally rolled out the framework for their $568 billion counterproposal to President Biden's $2.5 trillion infrastructure plan on Thursday.

Why it matters: The package is far narrower than anything congressional Democrats or the White House would agree to, but it serves as a marker for what Republicans want out of a potential bipartisan deal.

House passes bill that would make D.C. the 51st state

House Speaker Nancy Pelosi and Washington, D.C. Mayor Muriel Bowser. Photo: Alex Wong/Getty Images

The House of Representatives voted 216-208 on Thursday to pass a bill that would grant statehood to Washington, D.C.

The big picture: It's the second year in a row that the Democratic-controlled House has voted to recognize D.C. as the 51st state. The bill now heads to a divided Senate, where it faces little chance of reaching the 60 votes necessary to send to President Biden's desk.