The Timeless Trap: Why Investors Still Chase Highs and Flee Lows
H1 2025: retail traders netted $155.3B in single stock and ETF purchases — 53% above the prior year pace. Retail now accounts for approximately 20% of US stock market volume in Q3. The axiom holds, but the behaviour does not.
'Buy low, sell high.' The axiom is universal. The behaviour is not.
H1 2025: retail traders netted $155.3 billion in single stock and ETF purchases — 53% above the prior year pace, per Vanda Research. Retail now accounts for approximately 20% of US stock market volume in Q3. The record bull market is drawing in, not deterring, momentum-chasing behaviour.
The psychological mechanisms are well-documented: loss aversion drives premature selling at drawdowns; FOMO drives late-cycle purchases at peaks. AI tools may help investors access better information, but they do not override the emotional circuitry that drives these decisions.
The institutional advantage is not information. It is process: systematic rebalancing, pre-committed rules that remove discretion at moments of peak emotional pressure, and a time horizon that individual investors consistently fail to maintain.
For SGC readers: the single most impactful behavioural change available to a retail investor is a written investment policy statement — a document that defines entry criteria, exit criteria, and position sizing rules before the trade is placed. Discipline embedded in process beats discipline dependent on willpower every time.
