Retail investors told us why they flocked to Puerto Rico, and whether it was worth the move

Good morning and welcome to First Trade. The longest-ever US government shutdown appears to be close to a resolution. The market is loving it after a rough week, and stock futures are up.

Rundown

But first, let’s take a trip down to Old San Juan.

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Market musings

Picture a place where the beaches are plentiful, the sun is usually shining, and the nightlife is bustling. Oh, and did I mention major tax breaks on capital gains earned in the market?

Believe it or not, such a haven exists, and it’s completely accessible for all American citizens.

I’m talking about Puerto Rico, which has emerged as a destination for Gen Z and millennial day traders looking to minimize their tax bills while stacking market winnings.

BI’s Jennifer Sor dug into the growing trend, which has only gained steam in recent years. An attorney that Jennifer spoke to — who says he counsels hundreds of investors a year about possible moves to Puerto Rico — estimates that the trader influx doubled in 2024.

One investor who moved to Puerto Rico in 2018 — and now uses his sprawling network of lawyers and realtors to “onboard” other traders — says activity in 2025 has already surpassed last year’s, and has tripled since he first came.

Jennifer also spoke to a 26-year-old crypto trader who moved to Puerto Rico during the pandemic once he recognized the tax-break potential. He says the town where he lives, Palmas Del Mar, is “mellow” and that the lifestyle is like “being on a permanent vacation.”

But it’s not necessarily all sunshine and relaxation for new arrivals. Some of the day traders Jennifer interviewed lamented frequent power outages, a lack of clean eating options (since most of the island’s food is imported), and no one-day delivery.

Surely the bustling nightlife scene makes up for it? Not quite, Jennifer found. One source characterized the local scene as cliquish, while another said locals can be standoffish, bordering on hostile.

For some, however, the social difficulties are a welcome silver lining. Fewer distractions make it easier to focus on the task at hand: racking up the market gains that they moved to Puerto Rico to protect in the first place.

It’s ultimately what you make of it. You can bunker down and focus on trading, or — as one of Jennifer’s interview subjects recommends — you can lean into speaking Spanish, network, and explore the island beyond the San Juan city center.

As for me? You definitely won’t find me in Puerto Rico slinging stocks and crypto any time soon. I like my same-day Amazon Prime delivery too much. But it’s a compelling option that clearly works for many.

Read the full story here.

The tech-heavy Nasdaq 100 is fresh off its worst weekly sell-off since the beginning of April, when President Trump’s infamous Liberation Day tariffs rocked markets. (See the shaded portion of the chart above.)

One of the main smoking guns was Palantir, which tanked despite universally strong earnings. It served as a microcosm of the main issue that faced the broader market: concern over overextended valuations.

The inflection point for the week can be traced back to comments from Morgan Stanley CEO Ted Pick and Goldman Sachs CEO David Solomon, who warned of a healthy pullback in the next year or so that will allow traders to reassess.

What are your most burning questions about a possible AI bubble? Write in and let us know at firsttrade@businessinsider.com.

Persistently high US inflation hangs over the above chart like a cloud. While not plotted, it’s the driving force behind Bank of America’s overall point: President Trump’s approval rating (light blue line) has taken a hit in part because consumer prices have stayed so high.

This stands in contrast to the S&P 500 (dark blue line), which — despite sharp selling last week — is still within shouting distance of record highs. The divergence drives home the degree to which Americans are focusing on the inflation staring them in the face, rather than the stock gains passively juicing their 401(k)s.

Take BI’s survey about inflation.

In this section, a weekly feature on Mondays, we manage a hypothetical portfolio.

Current stocks: Amazon, JPMorgan, Nvidia, Palantir, Tesla

It finally happened.

I knew that, after we overloaded the First Trade index with high-flying mega-cap tech stocks, we would get nailed eventually. Such a strategy rides high when the market is going up, but gets hit doubly hard on the way down — and that’s exactly what transpired.

The presence of Tesla and Nvidia was rough enough. But the proactive addition of Palantir ahead of this week was the real back-breaking move.

The reason was simple: We were banking on a strong earnings report, and a commensurate gain in the stock. After all, Palantir shares were up 165% year-to-date through the prior week. What could go wrong?

Little did we know that the company would crush earnings — and that it wouldn’t matter at all. Investors instead elected to rebel against what they see as overextended valuations, and the entire market felt the effects.

When all was said and done, the First Trade index ended the week 4.6% lower, roughly triple the S&P 500’s 1.6% loss. After a brief period in the lead, First Trade is now underperforming the benchmark since the start of this project.

Can we turn things around? Should we ditch Palantir, or stick to our guns? Let me know at firsttrade@businessinsider.com (1) which stock you’d remove, and (2) which one you’d replace it with.

Joe Ciolli, executive editor and anchor, in Chicago. Akin Oyedele, deputy editor, in New York. William Edwards, senior reporter, in New York. Steve Russolillo, chief news editor, in New York. Huileng Tan, senior reporter, in Singapore.

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