How has retail investing evolved in the last decade?
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Over the past decade, retail investing has undergone a remarkable transformation. Technological advancements, shifts in market structure, and changing investor behavior have all played a part in reshaping how individual investors engage with the stock market. Today, it has never been easier to invest and potentially profit, with a range of new tools and platforms at the fingertips of anyone willing to dive into the financial markets.
From the rise of commission-free trading apps like Robinhood to the emergence of cryptocurrencies and alternative assets, the landscape has drastically changed. In this blog, we’ll take a look at how retail investing evolved over the last ten years and explore where it might be heading next.
What is Retail Investing?
A "retail investor" is an individual who invests their own money in the financial markets, typically through a brokerage firm. Retail investors buy and sell securities like stocks, bonds, and exchange-traded funds (ETFs), usually in smaller amounts compared to institutional investors. In recent years, many retail investors have also started exploring alternative assets, including cryptocurrencies, NFTs, private equity, private credit, REITs, and other digital and non-traditional investments.
These investors usually access the markets through online or traditional brokerage platforms, which have become more accessible and user-friendly. Some may consult financial advisors for guidance, but for the most part, retail investing is characterized by individuals managing their own portfolios for personal gain, without professional training or institutional backing.
The Retail Investing Surge
In 2020, a wave of retail investors flooded the stock market, driven in part by the COVID-19 pandemic, which kept many people at home and looking for new ways to grow their wealth. Over the next two years, around 30 million new individual investors opened brokerage accounts in the U.S. By 2021, retail investors accounted for 25% of total equity trading volume—almost double the share seen just a decade earlier, according to the Retail Investor Report by the UMKC School of Law Institutional Repository.
But what exactly has driven this surge in retail investing? Let's dive into the key factors behind this shift.
Rise of Commission-Free Trading
One of the most significant changes in retail investing over the past decade has been the elimination of commission fees. Brokerages like Robinhood were pioneers in offering commission-free trades, and soon after, major players like Charles Schwab, and Fidelity followed suit. This shift lowered the barrier to entry for retail investors and democratized access to financial markets.
With no transaction fees, small investors could trade more frequently, which contributed to the rise of day trading and speculative behavior. The ability to make smaller, frequent trades without worrying about fees was a game-changer for retail investors.
The Role of Mobile Apps and Platforms
Mobile trading apps played a pivotal role in making investing accessible to the masses. Platforms like Robinhood, Coinbase, Yieldstreet, Masterworks and others simplified the trading process, offering user-friendly interfaces that appealed to a younger, tech-savvy audience. With the ability to trade stocks from a smartphone, investing became something anyone could do, at any time.
In addition, many of these platforms incorporated gamification elements—rewards, badges, and notifications—to keep users engaged. While this strategy helped to attract a new generation of investors, it has also sparked debates over whether it encourages reckless or overly speculative behavior.
Rise of Retail Investor Education and Changing Perceptions
For years, retail investors were often dismissed as "dumb money," with institutional investors—referred to as "smart money"—considered the more knowledgeable and sophisticated market participants. Retail investors were typically seen as reactive, driven by emotion, speculation, and herd mentality, while institutions were assumed to make well-researched, data-driven decisions. However, this perception has started to shift, thanks to a combination of improved access to information, the rise of self-directed investing tools, and the growth of investor education within the retail community.
In the past decade, we’ve seen a significant increase in retail investors actively seeking to educate themselves about markets. Gone are the days when retail investing was driven mostly by gut feelings and tips from friends. Now, individual investors have access to a wealth of educational resources, from financial blogs and YouTube tutorials to in-depth stock analysis tools and online courses. Platforms like Investopedia and Morningstar have become valuable hubs for self-directed investors looking to deepen their knowledge, often without relying on costly professional advisors.
The rise of communities like Reddit, Discord, and X (Formerly Twitter) has also played a pivotal role in this shift. Rather than solely relying on traditional financial advice from institutional players, retail investors have turned to social media platforms to learn from one another, discuss strategies, and share real-time market updates. Subreddits like r/WallStreetBets became infamous for their role in events like the GameStop short squeeze, where users collaborated to drive up the price of a heavily shorted stock. This event illustrated how collective retail action, fueled by shared knowledge and coordinated efforts, could create substantial market movements, challenging the traditional notion that institutional investors have an inherent advantage.
Discord and YouTube specifically are platforms that have taken this social learning a step further. Dedicated groups and channels offer real-time discussions, stock analysis, and peer-to-peer support, enabling both novice and experienced investors to stay up-to-date with market trends and learn from the collective wisdom of the community. In these spaces, retail investors exchange tips, ask questions, and even crowdsource investment ideas, contributing to a more informed and engaged investor base.
In many ways, the rise of these communities has leveled the playing field, making financial education more accessible than ever before. Retail investors now have the ability to access expert-level information, tools, and strategies, often for free or at a fraction of the cost of traditional financial advisory services. This democratization of knowledge has transformed retail investing from a game of chance into a more strategic and informed pursuit.
Changing the Narrative: From "Dumb Money" to Informed Investors
As retail investors become more educated, the distinction between "dumb money" and "smart money" is becoming less clear. The success of community-driven movements, like the GameStop short squeeze and the rise of cryptocurrencies, showed that retail investors, when organized and informed, can have a significant impact on the market. Furthermore, the increasing sophistication of retail investing, aided by the abundance of online resources and communities, has made it harder to justify the outdated notion that individual investors are less capable than institutional ones.
While institutions still hold significant advantages—such as research, capital, and relationships—all of which are products of their substantial capital resources——retail investors are catching up in terms of market awareness and technical know-how. Many retail investors are now using advanced trading platforms, employing sophisticated strategies like options trading, and actively managing their portfolios using data analytics tools that were once reserved for professionals.
In summary, the rise of retail investor education, coupled with the power of online communities, is fundamentally changing how people approach investing. Retail investors are no longer content to follow the crowd or rely on outdated stereotypes; they are becoming educated, engaged, and empowered to make informed decisions. The once rigid line between "dumb money" and "smart money" is blurring, and as the retail investing community continues to grow and evolve, it’s clear that individual investors are playing an increasingly important role in shaping financial markets.
Increase in Retail Investor Influence
As retail investors gained more power, their influence on the market became undeniable. The GameStop short squeeze in 2021 is one of the most famous examples, where coordinated action by retail traders sent the stock price soaring. Another notable event occurred in 2021 when Elon Musk, CEO of SpaceX, tweeted a photo of his Shiba Inu puppy, Floki, sitting on a Tesla. The tweet led to a 55% surge in Shiba Inu coin, with trading volumes skyrocketing by 770%—a clear sign of how social media-driven retail investors can create viral market movements.
These examples demonstrate how retail investors are no longer just reacting to trends but actively creating them. Their collective actions have proven that they can move markets, sometimes more quickly and with greater force than institutional investors. The increasing influence of retail investors has fundamentally reshaped market dynamics, making it clear that individual traders now hold substantial sway over asset prices.
Increased Attention from Regulators
As retail investing became more mainstream, regulators began to pay closer attention. The rise of meme coins, volatile trading behaviors, and the influence of social media prompted concerns about market manipulation and the role of short-selling. Regulators are now examining how social media platforms are used to influence stock prices and whether this leads to unfair market practices.
There has also been a call for increased investor protection and education, particularly as more inexperienced retail investors enter the market. Many are pushing for greater safeguards to protect retail investors from volatility and the risks of speculative trading.
Crypto and Alternative Assets
Over the past decade, cryptocurrency has emerged as one of the most influential new asset classes, largely driven by retail adoption. What began as a niche interest among tech enthusiasts has grown into a multi-trillion-dollar industry, powered by individual investors seeking high returns and the appeal of decentralized finance. Bitcoin, Ethereum, and later other cryptocurrencies like Solana and XRP became mainstream thanks to easy access, as previously mentioned, through platforms like Coinbase, Binance, and Robinhood, which allowed retail investors to dive in without needing specialized knowledge or intermediaries. The rise of institutional interest—with companies like Tesla, Grayscale, and MicroStrategy buying into Bitcoin—followed the mass retail surge, marking crypto as a legitimate asset class in the eyes of Wall Street.
One key development that bridged the gap between crypto and mainstream finance was the introduction of Bitcoin ETFs (Exchange-Traded Funds). These ETFs, which track the price of Bitcoin, allowed traditional investors to gain exposure to digital currencies without owning the assets directly. This move made it easier for institutions and more conservative investors to dip their toes into the crypto market, further solidifying its place on Wall Street.
Crypto’s explosive growth isn’t just about speculation; it’s a clear “proof of appetite” for alternative assets that exist outside traditional, heavily regulated markets. Retail investors were drawn to digital currencies as an alternative to the established financial system, attracted by promises of decentralization, high returns, and, for some, a sense of rebellion against traditional banking structures. Along with cryptocurrencies, retail investors have ventured into NFTs (Non-Fungible Tokens), which represent digital ownership of unique items like art, music, and collectibles. Initially viewed with skepticism, NFTs have gained massive popularity, fueled by social media and the desire for new forms of investment. The surge in NFT trading—largely driven by retail traders—illustrates the growing demand for speculative and novel assets, even in the absence of clear regulatory frameworks.
But crypto and NFTs are just part of a broader trend. Retail investors have also begun exploring other alternative investments, such as real estate crowdfunding, peer-to-peer lending, and fine art. Collectibles—ranging from rare sneakers to vintage comic books—have also become popular investment vehicles, with platforms offering fractional ownership of high-value items. As retail participation in these markets continues to rise, it’s clear that traditional asset classes no longer dominate investor interest.
The rise of these alternatives reflects a shift in how retail investors view wealth-building opportunities—driven by access, innovation, and a desire to be part of emerging markets. While these markets are often riskier and lack the regulatory clarity of traditional assets, they represent a new frontier where retail investors are no longer passive participants but active creators of value.
The Future of Retail Investing: A Shift Toward Alternatives
Looking ahead, the future of retail investing is both exciting and uncertain. Technological advancements in fields like artificial intelligence, machine learning, and blockchain are expected to continue reshaping the financial landscape, creating new opportunities for individual investors. As new assets and investment strategies emerge, retail investors will need to stay informed and adapt to an increasingly complex market.
A key trend is the growing demand for non-correlated alternatives—assets that do not move in sync with traditional markets like stocks and bonds. This shift is driven by retail investors’ increasing desire for diversification and a move away from the often volatile and opaque markets of Wall Street. Platforms like Mars are stepping in to fill this gap, offering retail investors access to unique, non-traditional investment opportunities. Whether it's investing in art, startups, or other innovative assets, Mars and similar platforms are offering products that appeal to investors who want to diversify their portfolios in ways that feel more tangible and aligned with their personal values.
However, with new opportunities come new challenges including limited information, learning curves on alternative investments, illiquidity, among others. Regulation is likely to tighten, especially around sectors like cryptocurrency and social media-driven stock movements, as governments respond to concerns about market manipulation and investor protection. The scrutiny of retail trading will increase, and there may be a stronger emphasis on investor education to help individual traders navigate an increasingly volatile and complex financial ecosystem.
At the same time, younger generations of retail investors are increasingly turning away from traditional financial institutions and the products they offer. Many feel that Wall Street is self-serving, pushing financial products masked as serving the greater good. Retail investors, particularly younger ones, are looking for investments they can trust—assets that align with their values and support causes they believe in. Mars wants to empower those who want to support an emerging artist and earn a modest 7% return annually rather than invest in a commodity-backed mutual fund that offers 12% returns but lacks any meaningful connection to their personal beliefs.
This shift toward values-based investing underscores the need for investment platforms that prioritize transparency, ethics, and social impact over simply chasing profits. Mars, with its focus on offering alternative investments that are both unique and aligned with investor values, represents the future of retail investing—a market where individual investors are not only looking to grow their wealth but also to support things they believe in.
Ultimately, one thing is clear: retail investing is no longer a fringe activity. It has become a mainstream force, and the past decade of evolution is just the beginning. As more retail investors seek opportunities that align with their personal values and look beyond traditional financial products, platforms like Mars will continue to play a key role in reshaping the investing landscape.
Mars: Bridging Music and Retail Investing
Mars is uniquely positioned to revolutionize retail investing by blending music and finance, creating a platform where fans can invest directly in the artists they believe in—not just in catalogs or publishing. By connecting creators with their audiences through a regulated, transparent platform, Mars is democratizing access to the epicenter of the music business. Fans can now unlock unique insights, access real-time data, and engage with artists in ways that were previously unimaginable. Mars is not just offering a new investment avenue but is transforming passion into partnership, allowing investors to share in the success of the artists they support. With its focus on simplicity, transparency, and innovation, Mars is reshaping the future of retail investing—making it as accessible and rewarding as enjoying the music itself. By continuously improving our services, Mars is ensuring that every interaction, whether from an artist or an investor, is equitable and meaningful, driving the success of both the music industry and its fans.
Sources
- https://economictimes.indiatimes.com/markets/cryptocurrency/shiba-inu-coin-surges-55-after-musks-tweet-volumes-zoom-770/articleshow/86778355.cms?from=mdr
- https://irlaw.umkc.edu/faculty_works/928/#:~:text=In 2020%2C a wave of,percentage reported a decade prior.
