Sully: More Americans are diving into the stock market

SAN DIEGO (KUSI) – The American love affair with stocks is deepening as everyone from frenetic day-traders to institutions all of whom are diving further into the market.

Even Venture Capital and Equity funds are drawing fresh money at an unprecedented pace and hedge funds are boosting their stock exposure to a record.

“What’s interesting is that public companies themselves are re-emerging as big buyers of their own stock, with stock buybacks doubling from a year ago,” said KUSI Contributor and AM 760 radio host Sully Sullivan Sully on Good Morning San Diego.

Stock buybacks, or share repurchase, happens when a company purchases their own stock on the open market or from its shareholders directly.

In recent decades, share buybacks have overtaken dividends as a preferred way to return cash to shareholders and to look more financially attractive.

The downside to buybacks is they are typically financed with debt, which can strain cash flow – but companies are flush with cash so that’s not a worry at the moment!

Stock buybacks also tend to have positive effect on the economy overall.

The affection underscores growing confidence in an economic recovery, buttressed by government support and vaccines.