JPMorgan expects retail traders to keep buying stocks into next year

Investing.com -- Retail investors are likely to continue pouring money into equities through early 2026, according to JPMorgan analysts, who cited strong seasonality and sustained momentum in exchange-traded fund (ETF) flows.

Nikolaos Panigirtzoglou, an analyst at JPMorgan, wrote that “from a seasonality point of view, the strong momentum in the retail impulse into equities seen over the previous two months is likely to be sustained into early 2026.”

The bank noted that equity ETFs attracted about $160 billion of inflows in both September and October, “the strongest pace of equity ETF buying since November and December 2024 after the U.S. election.”

While U.S. banking system liquidity has been tightening, JPMorgan believes that “broader liquidity for non-bank sectors continues to expand strongly.”

The note also highlighted that “there have been outflows from mutual funds and leveraged equity ETFs offsetting the above inflows into unlevered equity ETFs,” though the overall picture still shows “the strongest retail buying since November and December 2024.”

Panigirtzoglou explained that selling in leveraged equity ETFs “should not be viewed as a sign of cautiousness but rather an attempt by investors to prevent their leveraged equity ETF holdings from rising too much” amid the market uptrend since May.

JPMorgan’s analysis of fund flow seasonality over the past decade is said to show that equity inflows “tend to be more elevated around year-end, i.e. more elevated for December as well as for the first quarter of a year.”

The firm concluded that this pattern implies “the strong momentum in the retail impulse into equities… is likely to be sustained into early 2026.”

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