Retail investors are getting burned by long/short strategies

Many hedge funds use short selling as an alternative investment strategy to offset risk

Hedge funds typically use a "long-short" investment strategy—where funds diversify by investing in a mix of long positions and short positions—to balance risk and maximize profits. Including short positions gives hedge funds some protection against downturns in the market, although the strategy can have uncapped losses for investors.

Retail investors are not professionals—they invest their own money

For retail investors, the stakes may seem higher and more personal. Critics say that this dynamic means that retail investors are more susceptible to behavioral biases that could lead them to make poor decisions when it comes to buying and selling assets. For instance, fear of missing out could cause a retail investor to buy a stock that is popular but not a financially worthy investment.

Retail investors cannot directly invest in private credit funds—but other financial vehicles can offer exposure to the industry

For example, as some US regulations have loosened in recent years, retail investors have begun to get exposure to the private credit market via ETFs that invest in publicly traded financial vehicles with private credit exposure, such as BDCs.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Investors need a 'margin account' to short sell stock

Margin accounts are leveraged accounts through brokerage firms that allow investors to make trades without the full amount of capital on hand. Similar to a secured loan, margin accounts often require some form of collateral and typically have a cap on how much investors can borrow. However, trading with a margin account is much riskier than a traditional investment account. Fees and charged interest are due on margin accounts, regardless of trade performance, meaning it's possible for investors to lose more money than just their initial investment.

Retail investors can get exposure to commodities via various financial vehicles

While retail investors likely won't go out and purchase a bushel of commodity wheat to trade, they can get exposure to the commodities market via commodity ETFs sold on traditional stock exchanges like the NYSE and Nasdaq and other financial vehicles. There are benefits to adding commodities to a retail investor portfolio (such as a hedge against inflation and a typically low correlation with more traditional asset prices), experts caution that commodities are usually volatile investments.

While day trading has risen in popularity in recent years, the SEC warns it is a speculative strategy that can cause big losses

A day trader is anyone who buys and sells a stock within the same trading day. They quickly move in and out of the market to try and profit. Some day traders are professionals, while others are retail investors.

Explore a step-by-step guide for getting started as a retail investor

Instead of purchasing individual stocks and bonds, new investors may want to start in funds that track an index—like the S&P 500—or that hold a group of themed stocks.

Hear why one short seller thinks short selling is now more important than ever

Carson Block runs an investment research firm and hedge fund, Muddy Waters Research and Muddy Waters Capital. Block is known for being an activist investor focused on identifying fundamental business problems that might cause a stock to be overvalued. Block says a decrease in investigative financial journalism, deregulation, and less oversight of businesses overall have increased the scope and scale of fraud, making short sellers that suss out overvalued stocks incredibly important.

The market share of institutional investors in the US housing market is less than 1%

Institutional investors have drawn negative media attention for their purported role in limiting housing supply and driving housing unaffordability. This report separates myth from fact in the nuanced discussion around institutional investors' role in the US housing market.

Not all alternative investments are easy to invest in

For instance, some alternative investments are only available to accredited investors or high-net-worth individuals. Others have relatively high fees compared to traditional investments.

Many retail investors exited the stock market after 2008, leading to a drop in individual market participation

That changed thanks to GameStop, federal stimulus checks, and strong corporate results in the first quarter of 2021. This chart plots how much retail investors poured into the market each day, reaching records in early 2023.

Some institutional investors are growing wary of private equity, as certain investments underperform traditional market indices

Private equity often attracts investors who can afford to tie up capital for long periods of time in exchange for higher returns than traditional investments. For many years, private equity at least tracked with the S&P 500 in terms of returns to investors, but in 2024 and 2025, it underperformed and posted declining returns.

How ‘vulture’ hedge funds make money

Some hedge funds specialize in snapping up distressed assets, like failing newspaper chains, and further stripping down their operational expenses in a bid to make a profit from the initial capital outlay. Delve into how one secretive firm known for the practice operates—and what’s at stake for the broader economy.

ETFs are rising in popularity

While less than half of retail investors hold ETFs in their portfolio, this figure is up dramatically in recent years, and experts forecast continued adoption as more options hit the market and total ETF assets under management continue to grow.

A landmark hedge fund court case once reshaped high finance

Hedge fund traders tied to insider trading by probing prosecutors are relatively rare. When billionaire hedge fund legend Steve Cohen, founder of SAC Capital, pleaded guilty to trading on inside information, Wall Street trembled. The outcome of the case remains a cautionary tale for traders today.

What happens when a hedge fund grows too big, too fast?

Dmitry Balyasny, who heads what has become one of the top US hedge fund firms, got a crash course in finance as a teenager, when he started trading stocks—and started losing money. Balyasny went on to lose a whole lot more money. But, this time, it wasn’t his to lose. To find out more about his firm’s remarkable comeback, read this article.

Platforms like AngelList help angel investors find startups to fund

Angel investors leverage their high net worths to fund seed-stage startups. While they could see high returns, investing in such an early company is a risk.

90 percent of active managers of large public funds underperform

High fees tend to eat away at whatever edge professional managers accrue, resulting in most such funds performing worse than their underlying benchmark indexes like the S&P 500.

It's difficult for individual investors to purchase IPO shares

Although the process of going public means the general public can invest in a company, the initial investment period is different. Before individual investors get in on the action, investment bankers sell the shares to larger financial institutions who can afford the asking price and risk associated with an IPO.

Robinhood's pivot from everyday investors to hyperactive traders

The platform was conceived as a hub for first-time investors looking to get into trading. After criticism in 2021, the company pivoted to focus on more regular, daily traders, among whom the company's CEO has now become a cult hero.

Tesla short sellers benefited from the company's poor performance in 2025

Tesla was widely considered the most-shorted stock until 2024, despite consistent short-seller losses. Between 2016 and 2020, short sellers reportedly lost more than $11B as Tesla's stock price continued climbing. However, long-held short positions began paying out in 2025 as Musk's foray into politics and his eventual feud with President Trump hurt Tesla's stock performance. In 2025, Tesla short sellers made more than $10B.

Bear raiding is a manipulative tactic to bring a stock price down—and part of why short selling can be controversial

Bear raids occur when short sellers use manipulative tactics—like spreading false rumors or coordinating trades—to artificially drive down a stock's price and profit from short positions. Although bear raids are an illegal form of market manipulation, they can spook investors, prompting large selloffs of shares and causing a company's value to plummet. As a result, investors may be hesitant to invest in the company in the future, creating a feedback loop of stock downturn.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

A deep dive into Enron, one of the largest accounting scandals in history

Investing comes with great opportunities for reward, but it also carries great risk. Investors learned that the hard way when Enron collapsed. Everyone lost money—from the largest institutions on Wall Street to mom-and-pop investors who bought S&P 500 index funds. This series from American Scandal starts with a close-up into an investment manager at Enron who started to unravel the accounting scandal happening behind the scenes. Listen here.

The venture capital mindset is shaping the US into a 'portfolio state'

For decades, the US has operated as a low-regulation, private-sector-driven, globalized economy (also known as neoliberalism). In recent years, the Trump administration has taken direct stakes (rather than providing subsidies) in private companies with strategic products like semiconductors and rare earths. This paper argues the approach allows the US to capture the upside of growth.

Only half of American workers have retirement accounts at their current jobs

Most American retirement accounts are not nearly funded enough to support people living longer, healthier lives. Get the details on five individuals at different stages of life and hear how they’ve saved—or not—while expert Theresa Ghilarducci explains the current weaknesses of the retirement regime in America.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

Venture capital is a form of funding provided to early-stage companies with high growth potential, typically in exchange for an equity (or ownership) stake

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Telehealth demand for GLP-1s for weight loss is booming as consumers seek easier access.

Despite being favored by 87% of Americans, Congress does not have term limits.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

Discover the catastrophic consequences of a failure of the US electrical grid—something that is more likely than many Americans think.

US housing costs have risen by roughly 175% between 1991 and 2026—but a growing number of Gen Zers are becoming homeowners anyway. In 2025, 4% of homebuyers were Gen Z, up from 3% the year before.

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Indefinite cloning of some endangered species may not sustain their longevity because cloning success rates decrease as genetic mutations accumulate.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

A Yale student wrote a profound essay about the consulting industry's influence on elite college students that was published in a book of her writing after she died in a post-graduation car accident.

The Beatles' US label rejected the band's first two singles, 'Please Please Me' and 'From Me to You,' with one executive calling the band 'dead in the water.'

The 1987 Nintendo video game 'Stadium Events' isn't known for being particularly fun, but its scarcity has made it a highly sought-after item that has sold for up to $35K at auction.

Between 10 million and 50 million people in the US develop rashes from poison ivy, poison sumac, and poison oak each year.

When caught in the mouths of cardinal fish, seed shrimp release glowing, bioluminescent chemicals, which alert predators of the cardinal fish, prompting the shrimp's ejection.

Explore chaos in this simulation of two double pendulums, where small differences in the release angles produce wildly different outcomes.

All rainbows are 'raincircles' caused by water droplets separating white sunlight into a spectrum of colors, but Earth's surface blocks the bottom half of the circle from our line of sight.