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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

Fringe right plots new attacks out of sight

Illustration: Aïda Amer/Axios

Domestic extremists are using obscure and private corners of the internet to plot new attacks ahead of Inauguration Day. Their plans are also hidden in plain sight, buried in podcasts and online video platforms.

Why it matters: Because law enforcement was caught flat-footed during last week's Capitol siege, researchers and intelligence agencies are paying more attention to online threats that could turn into real-world violence.

Kids’ screen time up 50% during pandemic

Illustration: Sarah Grillo/Axios

When the coronavirus lockdowns started in March, kidstech firm SuperAwesome found that screen time was up 50%. Nearly a year later, that percentage hasn't budged, according to new figures from the firm.

Why it matters: For most parents, pre-pandemic expectations around screen time are no longer realistic. The concern now has shifted from the number of hours in front of screens to the quality of screen time.

In photos: D.C. and U.S. states on alert for pre-inauguration violence

National Guard troops stand behind security fencing with the dome of the U.S. Capitol Building behind them, on Jan. 16. Photo: Kent Nishimura / Los Angeles Times via Getty Images

Security has been stepped up in Washington, D.C., and state capitols across the U.S. as authorities brace for potential violence this weekend.

Driving the news: Following the Jan. 6 insurrection at the U.S. Capitol by some supporters of President Trump, the FBI has said there could be armed protests in D.C. and in all 50 state capitols in the run-up to President-elect Joe Biden's inauguration Wednesday.