U.S. retail investors’ heightened market activity and engagement has been fascinating to watch over recent years. There have been a number of factors which have had a profound impact on the retail investor segment, including the pandemic, technological advancement in trading, the inflationary impact and more.

 

Retail investors can be categorized into four distinct groups. “Emerging Investors” are by and large the youngest, most inexperienced, enthusiastic, and adventurous group when it comes to investing. While the “Traditional Investors” group is less experienced also, they are beginning to ramp up investing and seek out financial professionals, analyst reports/ratings and other sources for information and advice. The generally older, “Established Investors” are really shifting into high gear with their investment ambitions, activity, and relatively large trades. While “Retirement Investors” are surprisingly active investors, they tend to outsource research and/or decisions to financial professionals rather than seeking information directly from companies.  While there are clear differences between the four groups, their collective enthusiasm about investing is equally clear.  They all lack innovative technology and trading tools that can help drive differentiated results and deliver consistent returns.