There-is-no-alternative gets a revival as U.S. households snap up stocks

By Barbara Kollmeyer

Goldman sees households buying $425 billion of equities this year

Retail investors, who've been buying U.S. stocks at a record pace in 2025 and helping shore up markets, are likely to continue doing so, offering support to valuations.

That's according to Goldman Sachs strategists who say "the TINA trade remains alive and well." That acronym stands for there is no alternative, in reference to investor preference for U.S. equities.

The S&P 500 SPX lags other major global indexes this year, though it has rallied nearly 20% from the April 8 lows.

Goldman strategists said their sentiment indicator tracking mutual fund and exchange-traded fund equity flows remained low in recent weeks, which contrasts with recent household positioning such as high-margin debt levels and stronger-than-average retail buying of individual stocks.

"Goldman Sachs trading desk estimates of flows from retail trading activity suggests close to $20 billion of net buying during the pastthree months," said a team of strategists led by David Kostin, in a note to clients late Friday. The buying pace in the 88th percentile relative to the past 5 years, they said.

That also lines up with brokers who have commented on stronger-than-average buying by clients during the April stock pullback, and sharp rallies for some popular retail stocks in recent weeks. Nvidia (NVDA) shares are up 25% and Tesla stock (TSLA) is up 30% this quarter.

"The resilience of household demand for equities is vital because households comprise the single largest direct ownership share of the US equity market," said the strategists. Households in aggregate own 38% of U.S. stocks directly, larger than any other major investment category. With indirect ownership through ETFs and mutual funds added in, that makes the household ownership share even larger and influential when it comes to U.S. equity supply and demand, they said.

As for the rest of 2025, Goldman strategists say "typical macro drivers" of those equity fund flows will keep households in the stock market. That's as they found that between 2000 and 2019, outflows from equities occurred during times of weakening balance sheets, high jobless levels or increases in short-term interest rates. And as none of those apply, Goldman expects households will buy $425 billion in stocks this year.

And look for retirement accounts to fuel that demand, with 401(k)s in particular a rising source of demand. "Within 401(k) plans, the average allocation of 401(k) plan assets to equities has grown from 66% in 2013 to 71% in 2022," they noted.

-Barbara Kollmeyer

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06-16-25 0551ET