2021 is a prime year for private and retail investors

Retail investors will have their say in the stock market this year, and the recent falls in GameStop and AMC Entertainment were just the beginning. According to Nikolaos Panigirtzoglou, Global Markets Strategist at JPMorgan, retail investors have invested nearly $ 500 billion in equity funds this year, as quoted by Business Insider. At the current rate, retail investors could invest an incredible $ 1 trillion in stocks by the end of this year. Retail investor investments skyrocketed during the pandemic as investors had more time and money to trade online. But it wasn't just a pandemic pastime. They got a taste for it, learned something on the side and now want more. According to a survey by Charles Schwab, 15% of current retail investors actually started investing in 2020. Quite a few Americans opened their first online trading accounts during the pandemic and used some of their stimulus checks to trade stocks. More time at home due to the quarantine and the emerging trend towards remote working has further increased the interest of private investors in the stock market - and that does not exclude people who have entered the market without any knowledge of investing. All of the major online stock trading platforms have seen a surge in demand over the past year. Many of the new users are young or even first-time investors. Over half of them are 34 years old or younger. Online brokers saw new accounts grow up to 170% in the first quarter, with more momentum gaining momentum each subsequent quarter. In total, more than 10 million new brokerage accounts were opened by private individuals in 2020. In the first three months of this year 2021 alone, 9 million new private customers jumped onto the market. Empowered by the epic short squeeze on GameStop and a few other stocks, this has been - and will continue to be - a terrific year for retail investors whose unexpected power to drive and influence markets is now felt far and wide. In late January, retail investors got together and drove GameStop stock to staggering heights, from under $ 20 to a high of $ 483. The collective group of Reddit users from the WallStreetBets subreddit bought the stock when hedge funds tried to short it. Goldman Sachs noted that a few months after the GameStop saga, retail investors slowed, but picked up again in May when retail investors increased their investment in so-called meme stocks. "Retail investors are likely to continue to favor the equity markets thanks to the 'anemic' money markets and credit yields. Also, a further surge in inflation would make stocks cheaper than bonds or cash," said Goldman Sachs. US households currently invest 44% of their wealth in stocks, according to the new Goldman Sachs report. That is almost the all-time high of two decades ago, shortly before the dot-com bubble burst. U.S. household net worth rose to $ 136.9 trillion in the first quarter, up 3.8% from year-end 2020, according to new data from the Federal Reserve. Of that, $ 3.2 trillion came from stock holdings.