The stock market has been on a record run and that is very good, in all likelihood because the fed is keeping interest rates low, the bull run will continue. When things are good, people and money flow into a winning formula. Some of that run will be new money and new ideas are always welcomed on Wall Street.
Wall Street has been dominated by institutional investors for years and the retail investor or the average person has been using pension funds or mutual funds or index funds to invest in the market. In an article by Tara Siegel Bernard of the New York Times News Service the retail investor component according to Piper Sandler is now 22% up 13% from a year ago. The prime reason for the increasing number is the 0 commission accounts.
Robinhood has millions of people downloading its apps; Charles Schwab added 866,000 retail customers up 81% from 2019 and half were younger than 41, most with less than $10,000. 1/3 of the growth is from people under 35.
The young people are watching investment manager Cathie Woods, there are reading Reddit and many are watching videos over TikTok. Similar to other areas on the internet, marketing campaigns by investment firms are using influencers to sell their products and services.
Linking to dividend paying stocks, when everyone first invests they want to make money or change a thousand to tens of thousands to hundreds of thousands. It does happen in the rare instance, if someone is fortunate and used margin and likely more risk than normal. The reality is over a long period of time investing in profitable stocks with a dividend will be more advantageous but it takes time to understand how compound interest works. Those who want to make money help ensure there is plenty of trading and that is why stocks go up and down, but the real winners are the long term winners, and patience is part of the strategy.
There are more questions than answers, till the next time – to raising questions.