The Rise of the Retail Investor and Armchair Financial Analyst

A perennial gamechanger ever since its influence reached into households, the internet continues to upend industries, disrupt cultural norms, and challenge the status quo. Name your sector – media, retail, finance, etc. – and the internet age has had a lasting impact.

When it comes to finance, nowhere is this more apparent than the rise of the “retail investor” and the armchair financial analyst. Often one and the same, these individuals are determined to make money in the markets and manage capital gains wealth without going through the traditional channels.

With that said, it would be inaccurate to claim these “average joe” investors and analysts are doing it all by themselves. The power behind the Secretlab chair is the myriad of online firms providing reliable financial advice and services at affordable prices and with minimal commitment.

One-stop-shops for financial services seem to be the most popular starting point. Financial service firms like Strategic Consulting offer a range of products and services that customers can evaluate with their specific situation in mind. Virtually everything can be done digitally, which is a significant selling point to those interested in protecting their finances while uncertain about handing the keys over to a fiduciary firm.

The next step for today’s retail investor is to find a user-friendly brokerage firm. The recent drama involving Gamestop and AMC Theater stocks involved an army of these investors utilizing app-based Robinhood broker services, which melted Wall Street several days before pressure forced company leaders to pull the plug.

As a result, users flocked to existing brokerage firms such as TD Ameritrade and E-Trade. That transition was made possible by the user-friendly updates these old school firms have made in recent years.

Despite the backing of qualified services and the demonstration of informed decision-making, today’s retail investors and armchair analysts continue to be considered second class compared to the more traditionally accepted financial professionals. It’s a slight that isn’t lost on these upstarts, many of whom are ex-industry insiders who – for one reason or another – are now hellbent on upending the status quo they once considered the standard of success.

It’s worth noting that amateur investors and hobbyist financiers are nothing new. Lacking the wherewithal to avoid financial ruin, their reckless investment choices were partially responsible for the infamous stock market crash of 1929. Over decades, the difference is the amount of influence this faction has on the overall health and destiny of the markets.

The role of low-rung investors and financiers was almost entirely sidelined in the decades after the Second World War. It was only with the advent of the internet that their significance and influence regained momentum. Setbacks, such as the 2008 crash and ongoing pandemic-related recession, are the only signs of distress when examining the situation in its entirety.

One thing is for certain: retail investors and armchair analysts are here to stay. It’s just a question of how much sway they’ll have over the markets in the months, years, and decades ahead. If the past is prologue, the influence will ebb and flow.