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How America’s retail army came to rule the stock market
Unbowed by the Iran war and other shocks, individual investors are buying their way to new heights of influence.
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Three forces are encouraging small investors’ deep faith in the stock market: stimulus, bailouts and technology.
PHOTO: EPA
Ruchir Sharma
Wall Street pros used to dismiss retail investors as “dumb money” – amateurs who knew no better than to chase the latest hot trade. But lately, the little guys have made impressive gains by “buying the dip”, and have arguably emerged as the single most influential set of investors in the stock market.
Awed by the way the retail crowd just buys its way through negative headlines, some pros have stopped sneering and started to follow their lead. The share of US households that own stocks has surged this decade to nearly 60 per cent, the highest proportion in any country. Americans are all in on the market, holding more wealth in stocks than in their homes for the first time. And retail is now the most active class of traders as well.
