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A Charles Schwab survey revealed that one-third of traders have restructured their portfolios in light of the Delta COVID variant.
The three most popular changes made by individual traders were an increase in exposure to equities or cash.
Traders are concerned about inflation and the possibility of a stock market bubble. They believe volatility will only rise.
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A Charles Schwab survey revealed that 33% of active stock traders changed their strategy in preparation for the spread of the Delta coronavirus. Another 50% were ready to adjust if necessary.
According to the report by trading platform provider, Friday's pandemic was the main concern of individual stock traders in the remaining months 2021, surpassing inflation.
44% of those who adjusted their weights increased their exposure to stocks. 37% preferred cash, while 34% preferred fixed-income assets.
Markets have been affected by the rise in Delta variant cases around the world in recent weeks. Investors are becoming more worried that this may lead to new and extended lockdown restrictions, which could have an impact on economic recovery.
Charles Schwab observed that there has been an increase in people trading since the pandemic. Nearly half of the people polled said they are changing their approach every month, if possible, to adjust for shifting risks.
"The market has seen an influx in new traders over the last 18 months, and as we look at this data, we see that traders both new and experienced are sensitive to the pressing issues such as inflation and the Delta variant," Barry Metzger (head of trading and education at Charles Schwab) stated in a statement.
95% of respondents considered inflation a danger. 95% of respondents believed that high rates would continue to be a problem, contrary to the Federal Reserve's assertion that the current high level of inflation is temporary. The release of US inflation data has prompted markets to react with concern. It is a factor in Fed's decision-making process on when and how to withdraw monetary stimulus. This support has helped to boost stocks.
The survey also revealed that 86% of respondents think it is likely that we are in a stock-market bubble. As the stock market continues to rise, investment strategists are warning investors about US equities. Richard Bernstein called the current market situation his biggest bubble in his career. Robert Kiyosaki, author of "Rich Dad Poor Dad", warned investors to be prepared for a 'terrifying market crash.
The survey also revealed that meme stocks still have a following, with nearly half of respondents saying that they had traded stocks like AMC Entertainment and GameStop this year. These stocks soared higher earlier in the year due to overwhelming demand from retail investors. Many of them congregated on Reddit.
Over a quarter of respondents said that they have traded meme stocks as a hobby, and not as part of their trading plans. The trend is expected to continue through next year according to most, with 23% saying it's unlikely to change.
The study, which was conducted in recent weeks by 500 traders from the US, surveyed 500 of them and found that they make at least 36 trades per year.
