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Retail investors are back and AI is here to welcome them

Alessio Garzonio

According to the most recent Public report, retail investors are back and eager to diversify their portfolios through new approaches to research and discovery.

Retail investors are pouring record amounts into US stocks, potentially giving small traders even greater sway over markets than at the height of the “meme-stock” mania two years ago.” (source https://www.ft.com/content/0ffaea2b-ba38-4dbc-bb52-499cdb0e1662).

JPMorgan showed that in January retail investors accounted for up to a quarter of all stock trading — a record.


Thematic products and platforms 

Emerging megatrends and cultural events are driving investors to explore new investment avenues, striking a balance between growth plays and fixed-income strategies. 

Indeed, Thematic investment products are at top level in retail investor choice. in particular AI thematic ETFs witnessed a 34% YoY increase in net new investors while EV stocks are gaining hype in terms of interest (+47% in pageviews on Public) but only 0.8% increase in investments.


The role of AI both as a theme and a tool

AI is not just a hot investment theme, but a versatile tool to make investment research.

According to Public research, 19% of retail investors currently employ AI for investment research, with an eagerness to learn about leveraging AI for portfolio strategies. AI is emerging as a balancing force against social media as a primary source for investment decision-making. 64% are using AI for analyzing stocks and 53% are using it for understanding sector and type of investments


The Buzz effect

Even if retail investors are moving to a more “strategy” and “savvy” investor type, most of them still base their investment on social media and cultural buzz.

Retail investors are placing a growing emphasis on due diligence and research, turning to artificial intelligence to inform their investment decisions and most of them (43% of Public surveyed) are using Social Media as source of information for research and due diligence. 

Also cultural moments are relevant for retail investors and those events are translated into new investors; the number of investors in companies like Mattel (MAT) and AB InBev (BUD) spiked due to positive and negative buzz.