Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeFinancial TimesInvestorHow America's retail army came to rule the stock marketUnbowed by the Iran war and other shocks, individual investors are buying their way to new heights of influenceAuthor of the article:Last updated May 06, 2026 You can save this article by registering for free here. Or sign-in if you have an account.According to Empirical Research Partners, retail investors have "trounced the professionals" by going double overweight on the "most controversial" momentum plays. Photo by Tero Vesalainen/Getty ImagesWall 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.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe share of U.S. 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.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againRetail’s share of daily trading in U.S. stocks doubled in the past 15 years to 36 per cent, surpassing that of big banks or hedge funds, and making them the market price-setters. Last year, U.S. retail trading topped US$5 trillion, exceeding the pandemic high, only this time Americans weren’t stuck at home or flush with savings. They were chasing returns and the shock of the Iran war has barely slowed them down. So far in 2026 they have remained net buyers on most days.Three forces are encouraging small investors’ deep faith in the stock market: stimulus, bailouts and technology.Record sums of money pouring out of government and central banks, intended to lift the fortunes of the real economy, have instead been used by households (particularly the richer ones) to invest in the stock market. With policymakers rushing to rescue the economy at the slightest hint of trouble, investors have come to believe the government will always bail them out. And low-cost, mobile trading platforms have given everyone easy access to investments of all kinds.It’s not that the nature of retail investors has changed completely. They still skew increasingly young, male and overeager. They chase returns when markets are rising fast and are classic “momentum” investors. So their habits have found fertile ground in the current momentum bull run; it is one of the longest ever, over 15 years and counting, with only brief pauses for shocks such as the pandemic and the tariff drama last April.In the past, the more retail investors traded, the more they lost. The pros watched the amateurs only to see which way they were going so they could bet the opposite way. Not any more. Nearly a third of the stocks held by retail are also held by “aggressive” institutions like hedge funds and growth-focused mutual funds — a record overlap. Lately, some institutions have even begun offering mutual funds that track stocks favoured by the retail class.According to Empirical Research Partners, retail investors have “trounced the professionals” by going double overweight on the “most controversial” momentum plays including, for example, those that have seen “supernova” price rises. Their favourites include precious metals and, above all, AI stocks. Last year, retail investors beat the S&P 500 by a solid 10 percentage points.Tech platforms and products favoured by retail investors, such as exchange traded funds, are growing explosively to meet demand. ETFs now outnumber publicly traded stocks in the U.S. (5,000 to around 4,000) and more than half of them launched in just the last three years. Many of the newer ETFs are offering amateurs first-time access to risky options once reserved for pros, such as leveraged bets on single stocks. Over the past decade, the assets managed by leveraged ETFs rose sevenfold to US$140 billion.These trends are making the market more democratic, in the sense that it is more accessible, but not necessarily more equitable. The typical newbie owns few shares and moves tiny sums of money. The richest one per cent own more than 50 per cent of U.S. stocks and gain most when the market goes up.But the larger the retail community gets, the more pressure builds on politicians to support the market. What was said of Wall Street banks after the crisis of 2008 can now be said of the stock market as a whole: it’s “too big to fail.”Still, markets cannot keep going up forever. The mania for AI-led momentum stocks will cool some day. An inflationary shock or the challenge of mounting government debts could eventually slow or reverse the endless flow of liquidity, and even restrain the next bailout. When that happens, it will shake the confidence of the retail crowd and turn these confident buyers into aggressive sellers.Until then, this army will keep marching on, undeterred by shocks and emboldened by their recent record.Ruchir Sharma is chair of Rockefeller International. His latest book is What Went Wrong With Capitalism.© 2026 The Financial Times Ltd Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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