Over the past few years, there have been three key events that have triggered massive interest in the financial markets: the bitcoin surge in 2017, the day-trading phenomenon in spring last year, and, most recently, the WallStreetBets saga.
Each surge has been controversial, but I’ve seen first hand the new wave of investors they’ve brought into the market — the kinds who have always aspired to invest in the stock market, but haven’t had the time or the resources to get informed and engaged. So it feels misleading to label these events as some kind of a “glitch in the system”. What we’re really seeing is the rise of the casual investor.
As with any big group, there’ll always be bad actors on the fringes — and the internet inevitably amplifies these stories. But we’ve essentially just witnessed the greatest onboarding of new investors to the stock market. And if even half of those build a healthy relationship with investing, that’s potentially millions of steps forward.
One of the biggest barriers that’s kept new investors from getting involved in the financial markets has been fear. Fear of making the wrong decision, fear of feeling out of their depth, fear of jargon, candlestick charts, and the sheer range of investment choices on offer. But a perfect storm of popular interest, more accessibility, and heightened volatility seems to have started eroding that barrier.
We see it in our own community: 80% of the Finimize audience invest, compared to 60% a year ago.
The rise of commission-free investing from both new brokers and incumbents alike has been opening up access to the stock market through free, frictionless, and fractional investing. Markets were at their lowest entry point in years after the pandemic hit, making it relatively cost-effective for first-time investors to take the plunge. And thanks to platforms like Reddit and Twitter, information has become easier than ever to find and share.
As more and more retail investors get involved, they’re bringing new kinds of behavior that a long-unchallenged industry suddenly has to adapt to.
We’ve observed three key differences in how they’re investing:
- They rely on new media that doesn’t eat up hours of their time — like newsletters, social media, and virtual communities. Over three-quarters of our community spend less than 25 minutes a day reading about the markets.
- They care just as much about what they can learn from the views and analyses of other retail investors as a company’s fundamentals: 94% of our community discuss their investment decisions with their friends.
- And they learn by taking action: 52% of our audience update their investment portfolio monthly or more — and if they want to learn about a market, they’ll go ahead and invest small amounts via fractional shares.
It’s never been more important to be able to filter through the noise, hear from experienced voices, and surround yourself with a supportive and engaged community.
And in that way, Finimize was tailor-made for the modern investing era.
It’s an era we’re excited to be a part of. After all, it was exactly the casual investor I wanted to empower when — tired of how opaque the financial industry was — I started Finimize. By closing the information gap between retail investors and the markets, I believed there was a new generation just waiting to make their own smart, informed decisions. And today, I believe that more than ever.
The casual investor has arrived, and is here to stay.
– Max
Founder of Finimize
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