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Published June 24th 2020

Covid-19: Casual Investors Take to the Stock Market During Lockdown

With bookies closed and stock market prices at record lows, a new set of investors are trying their hands

The stock markets have been up and (mostly) down throughout lockdown around the world. In fact, the pandemic triggered a global recession.

But, despite the uncertainty, we’ve found that rookies have been trying their hands on the markets.

Many consumers are buying in while prices are low in the hopes they can reap rewards when the ‘new normal’ kicks in. But others have just been having a go for some entertainment.

Using our Consumer Research platform, we investigated English-language mentions of investing and sports betting over five years to understand:

  • How interest in investing changed
  • Who is investing
  • Why people are investing
  • What they’re investing in

Interest in investng highest in five years

According to Google Trends, search interest for investing is now at a five-year high. And the number of global searches in the last six months increased 40% compared to the six months prior.

Google Search interest in investing at five year high

Source: Google Trends

When we investigated the sudden interest using social data gathered by our Consumer Research platform, we found English-language consumers were discussing buying in while the market was cheap, in the hopes of a guaranteed bounce-back when normality resumes.

Lockdown and the pandemic definitely inspired people to invest. On average, mentions across March, April, and May soared. In comparison, there was a real lack of interest in January and February.

Who is investing?

Online brokerages have seen a record number of new accounts created this year, and the big four (E-Trade, TD Ameritrade, Charles Schwab, and Fidelity Investors) have executed as many trades in March and April as they did in the whole first quarter of 2019. But what, and who, is driving this trend?

Google Trends data shows how popular simple investing apps have become during lockdown. Robinhood is a commission-free investment app that’s the hottest on the market. Google search interest in the app peaked in the first week of March.

Marc Ribinstein, newsletter writer of Net Interest, wrote: “43% of North American men ages 25-34 … who watch sports also bet on sports at least once per week, and that’s the same group that’s flocked to Robinhood.”

Using our Consumer Research platform, we investigated English-language mentions of sports betting and daily trading on social media from January 2017 to May 2020 to understand if consumer behavior is chiming with Ribinstein’s theory.

Compared to the three months prior, conversation about betting between March and April fell by 12% and mentions of daily trading increased by 26%. These stats certainly suggest Ribinstein is onto something when they claim that people are swapping from sports to stocks.

Using BuzzSumo we learned rookies were using YouTube to learn how to invest and reap rewards from the market’s downturn. The platform’s investment content had 613k engagements (people interacting with the content) in the last three months, making it the second most popular source of investing information after Axios (which had 1.2m engagements).

What are rookies investing in?

Low stock prices piqued interest from people in the last three months, with 42k mentions. Although it wasn’t just the lower price of stock hooking people in – Bitcoin had 388k mentions, and mentions of the cryptocurrency increased 136% from the three months prior.

Mentions of investing in gold (considered a safe and consistent investment) increased 62% during the three month period, up from December, January and February totals.

Cashing in on the real estate market wasn’t as favored. There were only 12k mentions in the last three months, actually down from pre-pandemic levels.

A new way to play

Many people have had to adapt to new hobbies to replace those that aren’t possible to partake in under lockdown. For sports fans, filling their time with bets on the stock market or penny stocks is an easy way to get a similar thrill to sports betting. It will be interesting to see if new investors from sports betting stick to it, but only time will tell.

This analysis originally appeared in our free, daily Covid-19 data bulletin. Sign up here to get the latest data first.

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