“Retail investors get into stocks when the momentum is strong, and then they get stuck, especially because they are sort of guided by momentum and impulsive buying,” said Dhananjay Sinha, chief executive and co-head of Institutional Equities. “There is a sort of cyclical engulfment of retail investors into the rally, and that drives up valuation, drives up returns, and more flows come in. As a result, when the tide turns, they get stuck,” he said.
