Shorts Squeeze Investor Trust

The huge stock price surges of heavily shorted companies like GameStop and AMC has pulled back considerably this week. Investors point to halts in trading and restrictions in share purchases from retail trading platforms like Robinhood as reasons for an “artificial decline,” although it appears the small investor hype has worn off considerably after record prices last week. As the market situations unfold and hindsight increases, a new survey shows how the biggest take away from this unprecedented event is a loss in market trust for many retail investors.

A new survey from Investopedia shows 42 percent of U.S. investors have less trust in the stock market than they did six months ago. Just four percent said they have more trust in the markets than they did six months ago, while 54 percent said they still have about the same amount of trust. Still, 58 percent of Investopedia readers surveyed said they believe their current portfolio is relatively low risk or a healthy mix of high and low risk.