Retail traders aren’t just ‘dumb money’ anymore: Here’s why

Yahoo Finance Video and Josh Lipton

Mon, February 23, 2026 at 8:00 PM GMT+9

In this video:

^GSPC

+0.69%

^IXIC

+0.90%

^DJI

+0.47%

ETOR

+0.58%

Gen Z and millennial retail investors are becoming more sophisticated, according to a new survey from eToro (ETOR). These groups have been diversifying into assets beyond just equities, regularly reviewing their portfolios, and more.

eToro US investment analyst Bret Kenwell sits down with Asking for a Trend host Josh Lipton to explain what’s driving this emerging trend and which parts of the markets are seeing the most inflows from these age groups.

To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend.

Video Transcript

00:00 Josh

Well retail may be shedding that dumb money moniker. New data from eToro showing a vast majority of younger traders are investing monthly, actively reviewing their portfolios and diversifying to assets beyond equities. For more we’re bring it in now Brett Kenwell, US investment analyst at eToro. Brett, it is good to see you. Uh, let’s start here. Uh your report suggests investors have grown up, they’ve matured, maybe moving beyond meme stock behavior and and YOLO trading. What what do you see on the platform that suggests that? That kind of suggests this shift?

00:36 Brett Kenwell

Yeah, Josh, I think when you look at retail today, you know, when so many of these younger investors in particular got involved with markets, it wasn’t that heyday, uh, coming out of COVID and you know, we had stimulus checks and, you know, everyone was at home and on social media and, you know, it it didn’t exactly promote the best investment practices necessarily. Uh, you like you mentioned, meme stocks and YOLO trades. You know, now retail has sort of lived through five

01:00 Brett Kenwell

six years of fairly notable market events. We’ve had the, you know, most recently in April, we had the liberation day sell off. Um, before that we had the 2022 bear market, and then of course COVID. And so in five to six years, that’s a lot of notable uh different environments, a lot of periods of volatility and they’ve learned from that. Uh that’s not to say that retail doesn’t engage um from time to time in in markets where they’ve, you know, believe there’s an opportunity. But for the most part, many of these investors engage in a much more

01:29 Brett Kenwell

sort of systematic type of way. monthly investments as the graphic you had up there showed uh 90% of millennials and Gen Z investing on a regular basis. Um, three quarters of investors overall reviewing their portfolios on a regular basis. So they’re really kind of engaged with this bigger picture theme when it comes to the market.

01:48 Josh

That generational point is interesting. So Gen Z and millennials investing monthly at the highest rates. Why why do you think that is? Why why are they maybe investing differently than Gen X and and boomers?

02:03 Brett Kenwell

That’s a good question. I I mean, anecdotally, I I think it’s their sort of engagement with the market. Now, with the tools that are around today with whether that’s using some sort of AI, um, product or even a an LLM, or if it’s just having that more regular engagement uh on social media, um, with friends and family, they’re they’re stepping into the market, I think because they know that sort of longer term trends, while we have some volatility in the short term, they know longer term it does tend to be okay and

02:27 Brett Kenwell

they want to participate in that. They want to go along for that ride.

02:30 Josh

What are retail investors, Brett, buying the most right now? Like, which asset classes, which themes are seeing the the biggest inflows? You know, is it US stocks, international stocks, crypto, commodities? What what do you see?

02:46 Brett Kenwell

So, in this survey, we are speaking about 1000 retail investors in the United States, but we’ve done this survey, we do this survey quarterly, um, on a much bigger scope to go also around the world. It’s 10,000 retail investors. What I can say from the US cohort of that group is, yes, US stocks not surprisingly is the favorite investment spot for these investors. But when we do, when we look at Q4 of 2024 through Q4 of 2025, um, so just for viewers, I suppose, we did the survey in in late October through

03:10 Brett Kenwell

mid-November. And so we had that sort of nice year-long, year over year look and we noticed that um investments in bonds, in foreign equities and bonds, in alternative assets like real estate, um in cryptocurrencies, commodities, namely gold, um all increased across the board. The only real decline was actually in cash. Um, so it it shows that retail’s sort of sprinkling their money around uh in different pockets of the market. But yes, US domestic equities are are still the favored spot.

03:37 Josh

Another data point that stood out to me, Brett, in this was gold. Gold ownership rose to 50%. That was up 8 percentage points from Q2 25. What what would you chalk that up to, Brett? Chasing performance? Is that inflation hedge, currency risk? What do you think?

03:52 Brett Kenwell

I that’s a, you know what? I kind of think it’s a little bit of both. So, we asked this, we’ve asked about gold a little bit more specifically, uh, in two quarters ago and then four quarters ago. So, we have these sort of intra-quarter or intra-year looks at what investors are doing with gold and why they’re doing it. Um, one one big portion of it was, yes, for the weakening dollar as the dollar’s weakened throughout 2025. Gold was actually the the top preferred way for retail investors to sort of um position

04:13 Brett Kenwell

themselves against that. But at the same time, gold has now outperformed the S&P in five of the last eight years. So, I I think it’s hard not to say that retail is also trying to play a little bit of offense when they’re looking at precious metals.

04:25 Josh

Finally, Brett, um, you know, we often talk about retail as dumb money, which I hate, I hate that, uh, because retail, I mean, retail’s been buying the dips. Retail’s been right, retail’s been smart. Do we have any line of sight, Brett, in in terms of how how retail’s been performing, uh, relative to institutions?

04:46 Brett Kenwell

I you know, I hate that label too for for retail because they’re they’re so adaptive, they’re so quick, they’re so nimble. That doesn’t mean that they don’t make mistakes. Of course, we we all make mistakes as investors, but you know, they’re this is a group that has learned to sort of embrace the risk that comes with the opportunity of owning stocks for the long term. And I think April was the best example of that. When we looked back through our data, we saw that retail stepped in in such a meaningful way on April

05:08 Brett Kenwell

3rd, 4th, and 7th. That’s a Thursday, Friday with the market finally bottoming on Monday, April 7th. And they kept buying that dip all the way through the month. And they that set them up to outperform institutions in 2025. I don’t think that they deserve the dumb money moniker, but you know, they keep shutting that year by year and I think as they keep making up a bigger part of daily volumes, they’ll keep shutting the label.

05:28 Josh

Brett, it was a great report, really interesting. I I enjoyed it. Thanks a lot.

Terms and Privacy Policy

Privacy Dashboard

More Info