{"text":[[{"start":7,"text":"The writer is chair of Rockefeller International. His latest book is ‘What Went Wrong With Capitalism’"}],[{"start":13.15,"text":"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."}],[{"start":38.75,"text":"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. "}],[{"start":56.35,"text":"Retail’s share of daily trading in US 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 US retail trading topped $5tn, 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."}],[{"start":90.15,"text":"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. "}],[{"start":124.35000000000001,"text":"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. "}],[{"start":149.60000000000002,"text":"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."}],[{"start":177.45000000000002,"text":"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. "}],[{"start":201.65,"text":"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 US (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 $140bn. "}],[{"start":235.7,"text":"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 1 per cent own more than 50 per cent of US 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”."}],[{"start":269.95,"text":"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. "}],[{"start":307.54999999999995,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777873003_9541.mp3"}