## Retail Investors Turn Net Sellers in December, Ending S&P 500 Rally Outperformance
**Westlake, Texas** – Retail investors, as tracked by Charles Schwab’s proprietary Schwab Trading Activity Index (STAX), shifted to net selling in December, concluding a three-month period where their trading activity had previously outpaced the S&P 500 index. The STAX registered 48.48 for December, a slight dip from November’s 48.75. This index, unique in its approach, analyzes the actual stock positions and trading behaviors of millions of Schwab clients, offering a window into real-time investor sentiment and market positioning.
Joe Mazzola, Head Trading and Derivatives Strategist at Charles Schwab, noted the typical year-end repositioning by retail investors. “We anticipate some portfolio adjustments as the year closes, and December followed that pattern,” Mazzola stated. “While this did indeed lead to net selling, the overall volume was modest. Throughout 2025, Schwab clients demonstrated a strategy of selling into market strength and buying on dips, particularly as the market approached 52-week highs late in the month.”
The December STAX period, which concluded on December 26th, saw retail investors’ trading activity fall behind the S&P 500 index, which itself experienced a modest gain of 1.18%. The net selling observed in December was largely concentrated in the holiday-shortened final week, suggesting it was more indicative of year-end portfolio rebalancing rather than a significant shift in investor outlook.
From a sector perspective, the technology sector, which was the largest net-buy in November, became the biggest net-sell in December. Consumer Discretionary followed as the second-largest net-sell, with Health Care, Industrials, and Energy also experiencing net selling.
The broader market saw major U.S. indexes reach all-time highs on December 26th, the same day the STAX period concluded. However, these new peaks represented only marginal increases from earlier in the month and from highs set in October. December was marked by a widely anticipated Federal Reserve rate cut – the third since September – and a surprisingly robust third-quarter Gross Domestic Product (GDP) growth figure. This was complemented by a softer-than-expected Consumer Price Index (CPI) for November, a key inflation indicator closely watched by market participants.
Analysis of investor aggressiveness revealed that Generation X (born 1965-1980) remained the most actively positioned investors tracked by Schwab. Conversely, Generation Z (born 1997-2012) exhibited the least aggressive trading behavior.
Among the most popular stocks purchased by Schwab clients during December were:
* Netflix Inc. (NFLX)
* NVIDIA Corp. (NVDA)
* Broadcom Inc. (AVGO)
* Amazon.com Inc. (AMZN)
* Alphabet Inc. (GOOG)
Conversely, the names most frequently sold by Schwab clients included:
* Tesla Inc. (TSLA)
* Palantir Technologies Inc. (PLTR)
* Intel Corp. (INTC)
* Warner Bros Discovery Inc. (WBD)
* Rivian Automotive Inc. (RIVN)
The STAX is calculated using a proprietary methodology that analyzes a statistically significant sample of trades from Schwab’s extensive client base. This data provides a unique insight into the real-world trading patterns of retail investors.
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*Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results.*
*This content is for informational purposes only and does not constitute investment advice, nor is it a recommendation for any security, strategy, or account type.*
*Historical data should be considered alongside other information, and individual financial circumstances and goals should inform investment decisions.*
*The STAX is an analytical tool and not a tradable index. It is not intended to predict future client trading volume or Schwab’s financial performance.*
**About Charles Schwab**
Charles Schwab is dedicated to empowering individuals to build a better financial future through investing. With a history of disrupting the industry, the company consistently innovates to benefit investors, as well as the advisors and employers who serve them, upholding a steadfast commitment to client success and integrity.
More information is available at aboutschwab.com.
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