Dip-buying, ‘TACO’ trade power strong year

Retail investors have had a gangbuster year in 2025.

Mom-and-pop investors bought the dip at key points this year, providing strong returns as the market climbed to all-time highs. Once thought of as unsophisticated and easily duped, a new breed of retail investor is giving the professionals who have long dismissed them a run for their money, according to investors and market data analysts interviewed by CNBC.

“Retail is just getting smarter, and they’re getting hardened to the market,” said Mark Malek, investing chief at Siebert Financial. In other words: These investors “really are growing up.”

Individual traders bought the dip at a faster clip during market drawdowns early in the year, according to JPMorgan quant analyst Arun Jain, who called it a “successful year” for this group. It was an effective strategy: 2025 is shaping up to be the second-best year since at least the early 1990s for dip-buying, per data from Bespoke Investment Group data published this month.

From May onward, JPMorgan said these investors shifted their focus from single stocks to ETFs. The group particularly dove into the SPDR Gold Shares (GLD) fund, with JPMorgan finding 2025 inflows topped the last five years combined. The gold-focused ETF has seen a record-setting surge of more than 65% this year amid the precious metal’s rise to all-time highs.

The result: retail investors’ single-stock portfolios have seen stronger profit-to-loss ratios than baskets tied to artificial intelligence and software run by JPMorgan, according to data from the bank released earlier this month. Everyday investors’ exchange-traded fund holdings had much higher profit rates than the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ), the firm found.

Big money ran for the hills as President Donald Trump first unveiled his plan for broad and steep tariffs on most foreign countries on April 2, which he dubbed “liberation day.” The S&P 500 briefly slipped into bear market territory as institutional investors worried the policy would drive up inflation and weigh on corporate earnings.

But retail investors jumped head first into the turbulence. They bought a record of more than $3 billion in equities on net on April 3 — even as the S&P 500 fell around 5% in the session, according to VandaTrack. Elevated buying continued the following day despite the benchmark average dropping another 6%.

Trump put most of his steepest duties on pause April 9, exactly one week after “liberation day.” Small-scale stockholders were on the ground floor of the S&P 500’s 9.5% surge that session. The broad index has climbed more than 21% since April 2. It’s on track to finish 2025 higher by more than 17% after hitting several new intraday and closing…