Investing Has Been Democratized, In The View Of US Retail Investors.

We see in news headlines and investor participation statistics that retail investing has changed. The playing field between everyday investors and Wall St. professionals is more level than ever before — at least in the minds of the respondents in our quarterly retail survey — This is driven by the innovation and proliferation of challenger brands on a mission to democratize finance. From mobile investing/trading, to lower minimums, to fractional shares, to digital assets, innovators afforded a broad cross section of the American public access to the capital markets, and thus a means to augment their wealth. Challengers were so successful at this that it also pushed established players to do the same. Now our job is to continue to expand the tent of participation.

There is no doubt that there remains a sizable wealth gap along ethnic, gender and age lines in America. However, progress is taking place. To understand this trend, we sought to understand the perspective of retail investors themselves. We see some interesting perceptions that confirm that the retail investor does indeed now believe that investing is no longer a rich man’s sport.

One: The profile of a retail investor is below middle income, no longer a rich man’s gig.

• According to the most recent census data (2022), the average median household income in the U.S. was $74,580, meaning the national range for the middle class is roughly $34,850 to $118,300.
• Our latest survey* reveals that most retail investors no longer see investing as a wealthy — or even a middle class — person’s luxury…
• 40% of Americans believe the profile of an “investor” is one with a base salary of $49k or below.
• 67% of Americans believe the profile of an “investor” is one with a base salary of $99k or below, meaning that most participants believe that investing is actually an “every person’s” gig.

Two: A realization of belonging among investors is starting to take place among participants, regardless of one’s ethnic, gender or generational identity.

• Majority of retail investors surveyed believe that the typical investor looks like them. In other words, they “see” themselves as an investor.

Three: Retail investors’ perceptions of an investor profile is increasingly more one who is confident, opportunistic and less risk averse rather than one who is fearful of the markets.

Four: There is no denying that crypto assets have entered the cultural zeitgeist of retail investors faster than any other asset class in history. Outside of stocks, which started trading in the US in the 1700s, cryptoassets have overtaken other asset types in the retail consideration set for investing regardless of the survey respondents’ gender or age.

Bottom line:

Retail investors’ perception of investing seems to have been transformed in terms of who invests. They no longer perceive investing as a wealthy pursuit of one type of individual. Investing perceptions seem to have transformed economic class, ethnic identity, gender or age.

In addition, a retail investor is no longer defined by adjectives that equate to fear. But rather, words like confident, competitive and optimistic seem to be winning out on how retail investors perceive the personality traits of a retail investor. Now that we have accomplished shifting the perceptions around retail investing, it is my hope that the broader macro statistics of who participates in investing also transforms more rapidly.