Retail investors are everyday individuals who buy and sell stocks through brokerage or retirement savings accounts. Unlike institutional investors, these nonprofessionals trade for themselves with their own money.
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Robinhood is both loved and hated by retail investors. Although its mobile app is easy to use and transactions on its platform are fee-free, many individuals have taken issue with a controversial practice that drives 75% of its revenues. Robinhood uses payment for order flow, essentially taking payment from other brokerages to redirect users’ trades. Read up on how PFOF works here.
For many investors, the ease of access to ETFs through brokerage apps and retirement savings accounts is enough of a draw. One unexpected perk is that ETFs are typically associated with lower capital gains tax requirements.
With fees removed from the equation and more time at home thanks to pandemic-related lockdowns, Americans who had never bought or sold stocks before started participating in the market. Charles Schwab dubs this cohort “Generation Investor” and notes individuals from all age ranges took part in this phenomenon. Study up here.
Online investing platform eToro conducted a survey of retail investors in June 2024. It explored what assets they held and what types of stocks they liked to purchase. The most commonly held asset was cash, with 76% of retail investors holding cash in their portfolios. The next most popular asset was domestic stocks, with 49% of investors.
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 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.
Investors are likely most familiar with ETFs that invest in an index or other grouping of stocks. However, BlackRock breaks down a wide variety of options, including commodity ETFs, currency ETFs, and bond ETFs.
In the early 1990s, stock brokerages knew that online trading would be a great equalizer, creating opportunities for more individuals to buy and sell stocks. A new era of trading began, in which average Americans researched stocks online and then used early platforms like StreetSmart and E-Trade to conduct their transactions.
A 10-question quiz from the SEC allows investors to test their basic knowledge about exchange-traded funds and their investing counterparts, mutual funds. Here’s a sample question: Is the past performance of a fund a good indicator of future results? (Hint, the answer is no).
GameStop stock began a meteoric rise in January 2021, rallying from a low of $2.57 to as high as $438. Keith Gill, a financial advisor who posted on social media under usernames including “Roaring Kitty” and helped mobilize the retail investors who drove prices higher. Backing from Chewy founder Ryan Cohen, who is now GameStop CEO, took things up a notch. Dive into the full timeline here.
The United States is home to more than 33 million businesses, the vast majority of which are small businesses, with millions being created (and others closing shop) every year. These businesses often rely on loans, provide the goods and services that keep the economy flowing, and sometimes even grow large enough to enter public markets or provide private investment opportunities. Explore key topics central to business and finance, from the role of the Federal Reserve to how initial public offerings work, how millions of American students finance higher education, and more.