Billionaires and Executives Are Dumping Stock — What Does That Mean for You?
Key Takeaways
- Some of America’s wealthiest investors have dumped $9 billion in stock so far this year
- With the S&P rallying, high-profile investors are cashing in
- Many of the recent sales have been in the tech sector
The recent market rally has caused billionaires and the otherwise uber wealthy to dump $9 billion in stock to cash out. According to Vanda Research, monthly net inflows into US equities are at near-record levels of about $1.4 billion per day. Billionaires tend to keep their wealth tied up in the companies they own, stocks, and in real estate and other assets — so why the selling strategy? We’ll explain.
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Who is selling and why?
The heirs to Walmart and Sam’s Club, the Waltons, have sold $4.39 billion in Walmart shares this year. Joe Gebbia, AirBnB co-founder, sold $893 million of AirBnB stock in the same timeframe. Larry Ellison of Oracle fame recently sold Oracle stock for the first time in two years — $848 million worth to be precise. And the list of sales goes on.
The exact reasons for these first-half moves vary. Some of the top sellers have left their companies, while others faced unattractive stock buybacks or soon-expiring options.
Across the board, though, the big dump reflects the significant stock rally taking place this year after a sluggish 2022. The S&P is up about 15% from January and the tech sector is riding high, largely thanks to attractive new players in the AI space.
What does this mean for the rest of us?
If the rally continues, we’re looking at potentially historic NASDAQ performance this year. But Interest rates are poised to go up again, and companies will have to sustain their momentum amid high interest rates and tight credit markets in the second half.
Experts are divided on whether we’re at the start of a bull market or a bear market rally. Looking ahead, the near-term offers both potential opportunity and possible risks for investors.
The bottom line
We don’t all have the significant stock options of the Walmart heirs, but we can follow their lead to be savvy investors.
Even though it’s hard to ride the waves of the market, staying invested in the slow times (hello, 2022) can pay off during a rally like the one we’re experiencing now.
The Emerging Tech Kit from Q.ai invests in tech companies across categories like stocks of leading tech companies, stocks from growth companies, and tech ETFs. Within each vertical, the Kit works to find the best investments to use each week and weights them accordingly.
Like all of Q.ai’s Investment Kits, Emerging Tech rebalances weekly to make the most of these tech verticals. And because this is a Foundation Kit, you can always switch on Portfolio Protection to help protect your gains, too.
You might not be a billionaire (yet) but you can start to invest a little more like one.
Download Q.ai today for access to AI-powered investment strategies.
