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For years, retail investors were dismissed by some on Wall Street as “dumb money.”That typically referred to those prone to trading on hype, or chasing trends rather than company or industry fundamentals, or responding late to big market moves.That’s no longer the case. An analysis of where retail investors put their money last year shows they outperformed two of the most popular, professionally managed index funds, SPY and QQQ, whose goal is to mirror the performance of the S&P 500 and Nasdaq 100, respectively.Retail investors accounted for $5.4 trillion in trading activity in 2025 across stocks and exchange-traded funds, or ETFs, according to Vanda, an independent data and research firm. That’s a nearly 47% increase from the previous year and the most going back to at least 2014.“I personally want to dispel the myth of retail being dumb money, because it’s not dumb money anymore,” said Joe Mazzola, head trading and derivatives strategist at Charles Schwab, at an investor education event held in Anaheim, California, last November that drew around 800 of the financial services company’s clients.Many Americans have long invested in the stock market, although largely hands-off through managed funds in retirement plans, such as a 401(k). But over the last decade, the advent of mobile trading apps, zero-commission trading, stock market-focused communities on social media and online tools for education and research has helped usher in a new era of do-it-yourself trading in stocks, crypto and other investments.The COVID-19 lockdowns were an inflection point. A new crop of investors, many young newcomers using investing apps like Robinhood, helped drive the “meme stock” frenzy that catapulted the price of GameStop, AMC Entertainment and other stocks.Meme stocks aside, years of mostly uninterrupted, strong stock market gains provided an attractive backdrop for more people to take up investing. The benchmark S&P 500 has posted an annual loss only three times going back to 2015.By early last year, the number of people moving money from checking accounts to investment accounts reached its highest levels since 2021, according to a report by JPMorgan Chase. Some may have been younger Americans who couldn’t afford to buy a house and instead put the money in stocks, the report suggests.All told, money coming into the market from individual investors jumped about 50% from 2023 to early 2025, according to the report.“I would say they are considerably more important as a force in markets right now,” said Steve Sosnick, chief strategist at Interactive Brokers. “Markets used to be really dominated by institutional investors, but if you put enough ants together, they can move a very big log.” Buying the dip Frank Sabia from Encino, California, started dabbling in investing in 2018. Over the years, he’s leveled up his market and trading knowledge by joining private investor chat groups online or attending investing seminars like Schwab’s.“I learned a lot more about options strategies and charting and everything from there,” he said in an interview in November. “Now I’m independent. I just look for my own trades. I have my own strategy. I hunt on my own.”Sabia, a high school registrar, said he trades in cryptocurrencies and other assets, but that his “bread and butter” is options trading.That involves trading contracts to buy or sell a stock at a specific price before a specified date. This can be less costly upfront than buying stocks, but can also be riskier, because options expire and a small move in a stock’s price can translate into a big swing in the value of options contracts.Last April, Sabia opened a Roth IRA account and bought into the market as stocks tanked after President Donald Trump announced a sweeping set of tariffs that were more severe than investors expected. The announcement sent the S&P 500 into a two-day tailspin of more than 10%, the type of plunge not seen since the 2020 COVID crash.“I just bought the dip,” Sabia said.He was wasn’t alone. Retail investors seized on the market skid, buying more than $5 billion in stocks over the two days, according to Vanda.“In April, it was retail (investors) that bought the dip,” Mazzola said. “They were the ones that were willing to step in front. They saw the opportunity.”Retail investors also had one of their biggest buy-the-dip days of the year on Oct. 10, when the market dropped 2.7% after Trump threatened a “massive increase on tariffs” on China. The AI trade and silver Retail investors haven’t slowed down this year. Their trading activity hit an all-time high on a rolling monthly basis last month, according to J.P. Morgan. They were particularly active in the last week of January, coinciding with the S&P 500 climbing to an all-time high.Retail traders also had a hand in turbocharging the price of silver last month to record highs by buying a record amount of silver ETFs, according to data from Vanda.A recent analysis by Charles Schwab of trading and stock positions by its millions of retail investor clients found they were net buyers of stocks in January, with Microsoft, Netflix and Tesla among the most popular stock buys. Some take on more risk Many retail investors have gone beyond stocks or ETFs and into other investment vehicles. Options trading, which can expose them to higher risk, accounted for about $650 billion of retail investors’ trading last year and has been mostly rising steadily going back to at least 2019, according to Vanda.Noah Goodwin, a junior in high school in the L.A. suburb of Castaic, started options trading on Robinhood Markets early last year using in his mother’s custodial account. It paid off right away.He bought $148 worth of Nvidia options on Jan. 20, 2025, the same day shares of the tech giant plunged on news of AI advances by Chinese startup DeepSeek.Goodwin sold his options later that day.“I made a $200 profit. My very first trade!” Goodwin said in an interview in November.Not all his trades have gone his way. In July, he thought he could capitalize on market volatility caused by more uncertainty over tariffs, but he miscalculated.“I lost a lot of money, like probably like around $600 to $800,” he said. “So, a horrible month for me.”“For the most part, with only some exceptions, buying the dip has tended to be a very profitable tactic for many retail investors,” said Sosnick. But he cautioned that the strategy had led to retail investors making trading decisions without giving full consideration to the risks and rewards.“The risk to it is that for many of them it’s become sort of mechanical,” he said. Balancing short-term and long-term trading It’s not uncommon for retail investors to strike a balance between higher-risk moves and making trades to build out a long-term investment portfolio.Andy Hu, a financial analyst in Los Angeles who attended the Schwab event in November, said he had 50% of his investment portfolio in the SPDR S&P 500 ETF Trust, a popular fund that aims to track the performance of the S&P 500.For his short-term trades, he tends to buy micro-cap stocks, which are very small publicly traded companies that can see big swings in price because of small trading volume.The approach had his active trading account up by around 20% through the first 11 months of last year, he said.Hu stopped making trades toward the end of last year when a pullback in big tech companies helped drag the S&P 500 to a monthly loss in December, clouding sentiment on Wall Street.“I haven’t made a single trade in the last two months,” Hu said. Alex Veiga, AP Business Writer
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E-Commerce
The American promise is one of equal opportunity, but in most of our communities today, access to the resources that enable prosperity are too far out of reach. Thats because there is one unseen factor that influences who is able to thrive and who cannot: capital. The flow of capital into communities has a dramatic effect on which kind of people can open small businesses, buy homes, and generally participate in the American Dream. Places that are already thriving are able to easily access capital. Banks see these neighborhoods as a safe bet and will readily support the opening of new businesses, construction of new homes, and mortgage lending. But those places that are strugglingand have been strugglingdo not receive the same treatment. These are the inner-city neighborhoods, the rural communities, and the suburban areas that have been abandoned. There are some capital options for these under-resourced communities. Nonprofit and community banks offer concessionary loans, and government grants help fill gaps. For example, the Bipartisan Infrastructure Law helped drive $28.3 billion in federal grants to over 1,500 cities, according to the National League of Cities. But this is not enough. We need a different way to think about capital to drive the prosperity that has been out of reach for too many for too long. THE 3 TYPES OF CAPITAL Decades of redlining, exclusionary lending, and the uneven distribution of government funds have created entrenched divisions in American communities. Despite legal reforms, barriers to capital still persist, including higher burdens for lending placed on marginalized groups, discrimination against those groups, and capital providers simply not showing up for these places. Over 12 million Americans live in a banking desert, with no bank close by. These deserts are rural and urban, but also overwhelmingly suburban: two thirds of banking deserts are in suburban areas. Overcoming these barriers is not as simple as getting more money out to communities that need it. Communities need ways to not only absorb the capital, but use it. Offering money is not enough; the dollars must be combined with expertise and knowledge to help get it to the people who actually need it. At Living Cities, we have identified three different types of capital that lead to prosperity: 1. Financial capital: Funds, credit, and investment needed to start businesses, buy homes, and generally support community growth. Systemic gaps in creditworthiness, collateral requirements, and bias in financing limit the spread of financial capital. 2. Social capital: Networks of trust, mentorship, and informal connections that open doors to opportunity. Research shows social capital is strongly associated with upward mobility and improved economic outcomes, with limited networks leading to lower rates of entrepreneurship and employment. Not all communities have equal access. Decades of segregation and underinvestment have eroded social infrastructure in marginalized neighborhoods. 3. Knowledge capital: Information, skills, and know-how required to navigate business, government, and civic systems. When you have financial capital, but lack knowledge of regulatory systems, market trends, and grant opportunities, the capital cant get to where it’s most needed and most effective. Knowledge capital is a multiplier: pairing capital with business training or legal literacy increases success rates for entrepreneurs. THE CAPITAL EQUATION IN ACTION Only when all three types of capital come together can the cycle of exclusion be broken. Offering only one isnt enough. For example, small business programs that blend loans (financial), local business incubators (social), and technical training (knowledge) see higher success rates than those providing only cash infusions. Our Breaking Barriers to Business cohort is leveraging all three types of capital to create and execute projects that create jobs through hands-on small business assistance. Cities should audit procurement, zoning, and economic development policies to identify the gaps in all types of capital access, not only financial capital. Any federal and philanthropic interventions should require grantees to demonstrate not only financial investment but strategies for bridging social and knowledge capital divides. TOWARD INCLUSIVE GROWTH Equitable capital flow is about more than headline numbers. Its about shifting the deeper patterns that determine who gets to build the future. By understanding and reshaping capital flows, cities can fire up new engines of shared prosperity. Joe Scantlebury is president and CEO of Living Cities.
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E-Commerce
Authoritarian acolytes will tell you that, to be strong, a country must demonstrate force. White House advisor Stephen Miller recently put that worldview plainly on CNN, arguing that the real worldis governed by strengthby forceby powera claim belied, as it were, by history. America did not become a superpower primarily by proving it could dominate. It became a superpower by proving it could partner. After World War II, the United States stood unrivaled militarily. Yet it did not rely on force alone to secure its position. Instead, it invested in rebuilding a shattered world. The Marshall Plan was not charityit was a strategy, linking economic recovery with political stability and turning war-torn nations into long-term allies. By helping others prosper, the U.S. increased its own security and economic future. That is soft power at work. Dwight Eisenhower, a five-star general, advanced the idea that diplomacy is not the sole province of governments, and that when people know you, they are less likely to fear you. And when they trust you, they are more likely to collaborate with you. John F. Kennedy carried that logic forward with the Peace Corps. The program sent a clear signal that American power included service, partnership, and humility. In a Cold War offering competing models to aspire to, that mattered, and it continues to matter today. THE ROLE OF SOFT POWER Soft power was never intended to be solely a government project. After the collapse of the Soviet Union, the United States again faced a pivotal choice: declare victory and walk away or support the hard work of transition. Out of that moment emerged citizen diplomacy initiatives like what later became Pyxera Globalformed at the behest of the George H.W. Bush White House that called for a Citizens Democracy Corps to mobilize private-sector volunteer expertise to help planned-economy societies build market economies and democratic institutions. Alongside these efforts, agencies like USAID institutionalized development as a pillar of U.S. foreign policyinvesting for decades in health, education, food security, and economic growth as tools of stability and influence. That modelpublic purpose paired with private capabilityhas always been central to Americas soft power. There are certainly many situations and geographies where U.S. engagement fell woefully short. Still, taken together, these efforts point to a simple conclusion: Americas influence has been strongest when it was most usefulnot most intimidating. Soft power was never a weaknessit was leverage. That history matters now. When the U.S. government pulls back from development, diplomacy, and partnership, the vacuum does not remain empty. Other forces are surely eager to fill it with transactional relationships, debt dependence, and authoritarian influence. If Washington is narrowing its role now, the private sector faces a choice of its own. It can retreat inward, treating global instability as someone elses problem. Or it can recognize a simple truth: A stable world is a prerequisite for sustainable business. Soft power is not philanthropy. It is long-term risk management. HOW BUSINESS CAN STEP INTO THE GAP None of the following actions is a substitute for government. But they represent a sampling of ways that global business now has the opportunityand the capacityto step into the vacuum. Normalize board service as leadershipnot a side project. Encouraging executives to serve on nonprofit and civic boards strengthens institutions at a time of severe resource constraints, when we need them to function well. It also builds empathy, governance skills, and real-world decision-making capacity, qualities companies claim to value in leaders. Scale skills-based volunteering. Finance, compliance, cybersecurity, HR, and logistics are some of the skills that many public and nonprofit institutions cannot easily access. Deploying them fills a dire resource gap while meeting employee demand for purpose-driven work that uses real expertise. Double down on supply-chain resilience as a form of stability. Diversifying suppliers, investing in transparency, and ensuring local equity reduce exposure to disruption and coercion. Resilient supply chains are not just good businessthey help anchor opportunity and stability in the places where companies operate. Expand community-driven initiatives where companies operate. Corporate success cannot sustainably outpace community well-being. Health, nutrition, education pipelines, workforce training, and local economic development are not public relations gesturesthey are investments in human capital, social cohesion, and long-term operational continuity. THE POWER OF PARTNERING Taken together, and implemented at scale, these actions underscore a simple truth: strength is not only the ability to strikeit is the ability to attract, rebuild, and partner. And if Washington continues to pull back from soft power, global business can advance something new, durable, and worth trusting. Deirdre White is the CEO of Pyxera Global.
Category:
E-Commerce
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