Trends with Benefits
Trends with Benefits #31: The Impact of Retail Investors with Phil MackintoshEd Lopez, Head of ETF ProductOctober 20, 2020
Retail Investors Make an Impact
The last time I remember day trading getting the kind of coverage it has recently was in the late 1990s as personal computing power increased and internet access became more common. At the same time online brokerages promised cheaper stock transactions, more information and easier access that allowed a wider group of people to trade the dot-com wave.
Today may have some similarities to the '90s, such as faster computers, a buoyant stock market, falling trading commissions, and greater access in the way of fractional shares. One thing that is different, however, is 'work-from-home', spurred on by the coronavirus. Maybe the increase in retail trading is a passing fad, a way to pass the time in between Zoom meetings or maybe we'll find a new normal for individual investors' engagement in the markets.
In his role at the Nasdaq exchange, Phil Mackintosh has a courtside view of activity in the markets and he's written about the increased retail activity this year. In my discussion with him, we talk about what he's seen, what individual investors tend to trade, how they trade and what he thinks it means for market quality.
Individual investors are an important part of the market ecosystem and financial education remains critical. Nasdaq launched Smart Investing, an investor education website to help people just starting out or looking to brush up on their investment knowledge.
Trend or Fad
Listen for Phil’s take on financial transaction taxes, Zoom weddings, the term “K-shaped recovery”, and cryptocurrencies.
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