:max_bytes(150000):strip_icc()/GettyImages-2247462071-07dd96db382348e8ae4b4ce9f8f905e6.jpg "Why Robinhood’s CIO Has Been Looking to ‘Protect Some Capital’ Lately")
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Key Takeaways
- Robinhood’s automated investment portfolio added to its T-bill exposure last week, she said, a move toward some of the safest investments around.
- Guild said retail-investor trading volume hasn’t been as big compared to other downturns, but there was net buying on the dip.
Some “smart money” has been seeing signs of rain—and reaching for the umbrella.
Robinhood (HOOD), the company behind the popular retail trading app, last week added to its allocation to T-bills, the short-term Treasury notes considered some of the safest investments around, “to protect some capital,” CIO Stephanie Guild said in an interview with Bloomberg TV on Wednesday.
“I felt like the market was giving you signs that it was going to sell off a bit,” Guild said.
As the Cboe Volatility Index, or the VIX, spiked and broad market benchmarks reflected investor jitters, some pros were making moves to shore up their portfolios. Meanwhile, retail investors have started to tiptoe back into some of this year’s high-flyers after they took a dip.
Why This Matters to Investors
Institutional investors are sometimes referred to as “smart money”—and the general public “dumb money”—because the former tends to be a step ahead on market pivots. Robinhood’s robo-advisor has lately turned more defensive, potentially a caution signal worth heeding.
Robinhood Strategies, the March-launched robo-advisor with over $1 billion in assets, added to its healthcare investments in October, according to Guild, and slimmed its holdings in technology. She said investors were right to start questioning the valuations of stocks ginned up on the AI-rally, and that while she believes in the possible benefits of the technology, one has to reckon with the short-term question of how much it’ll cost to develop.
The company’s managed portfolios are also invested in rare earth stocks and industrial defense companies. a nod to the Trump administration’s policies.
“The Fed matters less than it used to,” she said. “I think the President and [the administration’s] actions matter a little bit more.”
The Robinhood CIO also characterized the recent dip as “kinda normal,” and observed that retail investors were wading back into the names that had rallied hard and more recently were “hurt the most”—stocks like CoreWeave (CRWV), Nvidia (NVDA), and Meta Platforms (META).
