Retail Investor: 'I'm Being Careful Just in Case' Stocks Keep Selling Off

Some retail investors are being more cautious and changing their investing habits amid the recent market selloff.

"I’m investing a little differently because of the volatility," Tom Abruzzo from Long Island, New York, tells Yahoo Finance.

"I’m choosing individual stocks because there are some great deals out there currently. I’m also being careful by not putting as much into the stocks that I like, just in case they keep on selling off," says the investor, who alsoruns a stock market hat shopas a hobby.

Abruzzo's cautiousness appears to be a trend among individual investors. The meme mania has fizzled as stocks inside the basket popular among the retail crowd have been severely beaten amid the likelihood of higher rate hikes from the Fed to fight inflation.

Meme stocks: 'retail traders leaving this herd mentality'

"Just the fact that they're [the Fed] going to be pulling the punchbowl away, that they're going to be raising interest rates means we've got to reprice all this stuff," Matthew Tuttle, CEO and CIO of Tuttle Capital Management recently told Yahoo Finance in reference to last year's high valuations of retail investor's popular stock picks.

AMC (AMC)was the most searched ticker in all of 2021, followed by Tesla (TSLA), and GameStop (GME).

"I expect the meme stock rallies we saw through 2021 to taper off in 2022,"Dan Raju, CEO of Tradiertold Yahoo Finance in a recent interview.

"We’re seeing a graduation effect of retail traders leaving this herd mentality. They are adopting advanced trading platforms and diversifying to more sophisticated trading instruments, like options and crypto," he added.

Roughly more than 12 million new retail investors entered the market after 2019 and engaged in trading during the pandemic, giving way for a surge in retail investing.

WallStreetBets, the forum on Reddit which became synonymous with retail trading during the GameStop frenzy last year, saw its membership forum skyrocket from just under 2 million to 11.6 million members today.

An AMC theatre is pictured in Times Square in the Manhattan borough of New York City, New York, U.S., June 2, 2021. REUTERS/Carlo Allegri

A scroll through the latest thread shows the difficulty in making money during recent market volatility.

The daily discussion on Monday included: "The fed will boost stocks, Russia won't invade, and you won't make any money regardless of what happens," wroteBeardlessPete.

"I’ve never traded a market that made less sense," wroteanother member.

Retail investor Abruzzo puts some of the sentiment into context as he tells Yahoo Finance, "I think there’s so much uncertainty on what’s priced in currently. A few things are happening at once right now and I just think retail is being more cautious."