Retail investors keep getting burned in the stock market. They’re piling in again now.
Subscribe to enjoy similar stories.Wall Street’s ambivalence toward retail investors was summed up by Joseph P. Kennedy Sr., explaining what convinced him to get out of the stock market before the Crash of 1929.It was, he said, unsolicited investing advice from the guy polishing his wingtips.“When the shoeshine boys have tips, the stock market is too popular for its own good,” said Kennedy, who sold short and made a fortune, giving rise to an American political dynasty.The story seems too perfect to be true, but it underscores the basic tension between Wall Street and individual investors.
Wall Street wants their money, it just doesn’t want them.In the eyes of the pros, the “little guy” is easily sold on the latest racket, and prone to panic when things go wrong.Yet, from the time of the railroads, U.S. industry has needed the capital that mom-and-pop investors can provide.Regulators go back and forth on how much leeway small investors should have.
The Securities and Exchange Commission just moved to drop the “pattern day trader” rule that required frequent traders to keep at least $25,000 equity in their margin account. The change is expected to juice retail trading.Individual participation has waxed and waned, rising in good times and falling after crises like the 1929 crash and the 2007-09 recession of 2007.In 2025, 62% of Americans reported owning stocks, directly or indirectly, according to Gallup, close to pre-2007 highs.
The increase was driven in part by a pandemic-era surge of retail investing on apps like Robinhood, where the rise of “meme” stocks have roiled the market.Still, it remains a game for the rich. The wealthiest 10% of Americans own 87% of all corporate equities and mutual fund shares, with the
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