According to Goldman Sachs, retail investors now hold $12 trillion in self-directed brokerage accounts, representing about 10% of the total U.S. corporate equity market value.
Analyst Daniel Chavez noted that retail trading volumes have risen 28% since mid-April, with a basket of retail-favorite stocks gaining 29% over the same period.
The easing of pattern day trader rules is likely to boost retail activity further. Retail trading currently accounts for roughly 20% of total U.S. equity trading volumes, up from 15% a decade ago.
Goldman Sachs observed that retail investors tend to buy during market declines, with margin debt at 1.8% of customer assets, matching the 2021 high.
The bank warned that stocks with high retail participation often carry higher valuations and above-average volatility, and tend to underperform after earnings misses.
