The rise of retail investors

I read a fascinating stat the other day either on a newsletter or in a deck. I of course forgot to write down the source and I can’t remember exactly where I found it.

The data point was that retail investing more than doubled from 11% of total trades to over 23% in the span of a year. I thought that was fascinating. Almost a quarter of all trades done are now done by retail investors.

When I was just starting to learn how to invest just a few years ago, I was told that retail investors do not move the market. Institutional investors did the bulk of buying and selling. Retail investors were just in for the ride.

Well, as we head into 2022, we now know that power of retail investors. We have seen meme stocks go crazy with AMC and Gamestop earlier this year. Professional investors who invest other peoples’ money can no longer ignore the possibility that a group of retail investors on Reddit can band together and move the market.

If 2021 is a snapshot in the future of investing, 2022 is going to be exceptionally interesting. With crypto, gone are the accredited investor regulations (for now at least). Web3 is at it’s infant stages and I expect 2022 to be the year that web3 officially arrives for the mainstream.