Risk Appetite Continues to Rise
Goldman Sachs' latest research highlights a notable increase in investor risk appetite from December last year to January this year, despite rising geopolitical tensions. This trend suggests a generally optimistic outlook among market participants regarding future economic prospects.
Increased Leverage in Trading
Data shows that leverage in margin accounts has surged since April last year and has now reached the highest level since 2021. This indicates that investors are actively borrowing capital to support their trading activities.
Broader Investment Exposure
Beyond the 'Magnificent Seven' US stocks, retail investors are gradually shifting their capital toward more diversified asset classes and expanding their exposure across different regional markets. This marks a shift in investment strategy.
Declining Volatility Expectations
Notably, short bets against the VIX volatility index have continued to rise, with short positions relative to long positions reaching a ten-year high. This reflects a broad market expectation that volatility will decline in the near future.