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. Retail investors may treat investing as a form of entertainment, a way to save for retirement, or a stream of additional income. Because they are typically not professionals and may have no formal training or education in investment, retail investors may be more susceptible to risk.
Hours of research by our editors, distilled into minutes of clarity.
Using platforms like Robinhood, everyday investors became a growing presence in financial markets during the Gamestop short squeeze, revealing the influence retail investors can have on the market.
Want to try day trading but don't want to risk losing cash? This simulator gives users access to "unlimited" fake money, as well as the option to convert their simulation accounts to the real deal later on.
"I am not a cat, I am not an institutional investor, nor am I a hedge fund." That's how Keith Gill, aka Roaring Kitty, kicked off his testimony before Congress on the wild trading action in GameStop stock. Lawmakers took notice of the meme stock craze, and the collapse of hedge fund Melvin Capital, opening up an investigation into what exactly moved so much money.
Keith Gill was a financial advisor who posted on social media under usernames including "Roaring Kitty." Backing from Chewy founder Ryan Cohen, who became GameStop's CEO, took things up a notch.
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.
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.
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.
Retail investors may not have the same resources institutional players do, but thanks to the internet, they can access several free tools that provide a leg up. These tools do everything from recommending portfolio allocations to helping investors screen stocks.
Retail investors often trade 100 shares at a time, while institutional investors trade 10,000 or more. The biggest difference is that, unlike retail investors, institutional investors are professionals who are trading someone else’s money.
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.
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.