The year 2021 was a sort of coming of age moment for retail investors. Companies like AMC Entertainment and GameStop were paralyzed by the global pandemic, triggering massive shorting by hedge funds seeking to profit from their collapse.
And then, in the most unexpected way, retail investors crashed the party.
They did it by lifting the share price of these beaten down companies with frenzied buying. And through a coordinated digital uprising on social media platforms like Reddit, Twitter and YouTube, the world of investing was never the same.
It taught everybody, especially Wall Street’s big wigs, not to underestimate the impact of the average Joe investor.
A just released study of retail investors by NASDAQ confirms the expanding influence of retail investors in another fast growing market: the ETF arena.
These were among the study’s findings:
• Appetite for investing in ETPs (exchange-traded products) is high across all generational demographics and more education and tools are needed to help them make informed choices.
• Investors across all generations trust financial advisors more than any other resource for making investment decisions.
• Although younger generations like Gen Z and Gen Y use a variety of external resources, advice from financial advisors still ranked higher among those groups.
The study noted how changes with the public’s investing habits aren’t necessarily uniform.