“It was very devastating. I couldn’t sleep,” Emily said. After quitting her job in human resources at the end of 2019 for a full-time exchange, she now works as a delivery driver.
Her story is a warning about what can happen when booming markets make inexperienced investors risk everything.
For every Emily, there is a tiny trader who rode this year’s stock market boom, fueled by the economic recovery, central bank money printing, and government cash donations.
TD Ameritrade, the broker Emily used, and Schwab added six million new combined accounts this year.
The conditions were right for retail even before the pandemic, as new mobile platforms allowed individuals to buy stocks, or fractions of shares, without commission.
“Everyone can have their piece of the pie,” said Ben Phillips, a 30-year-old London-based pilot who started trading in 2019. He calls himself a long-term investor, but also day trades “like a bit of fun, a little play. “
The retail surge was the “main reason” for global demand for equities which reached $ 1.1 trillion this year, JPMorgan strategist Nikolaos Panigirtzoglou said.
“By acting as dynamic traders, retail investors will most likely continue to propagate the stock markets, at least for the year to come. They will have no alternatives as interest rates will stay close to 0%. “, he added.