economy

December 31, 2025

Retail investors close out one of their best years ever. How they beat Wall Street at its own game

Mom-and-pop investors bought the dip at key points, giving them outsized benefits from the market's run this year.

Retail investors close out one of their best years ever. How they beat Wall Street at its own game

TL;DR

  • Retail investors have had a "gangbuster" year in 2025, achieving strong returns and reaching all-time market highs.
  • They effectively employed a "buy the dip" strategy, particularly during market drawdowns early in the year.
  • Retail investors shifted focus from single stocks to ETFs from May onward, with significant inflows into the SPDR Gold Shares (GLD).
  • The "TACO trade" (Trump Always Chickens Out) strategy, which involves buying during policy-induced downturns with the expectation of reversals, benefited retail investors.
  • Retail investor participation and market share have surged, surpassing levels seen during the meme stock craze of early 2021.
  • The perception of retail investors is changing, with increased access to market data and research leading to a reputation for sophistication.
  • A key question remains about how retail traders will react to a prolonged market downturn after years of gains.

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