Retail Investor
What is it?
It refers to an individual investor who participates in the financial markets and makes investments with their own resources. Refers to an individual investor who participates in financial markets and makes investments with their own resources. Retail investors typically have less experience and lower investment capacity compared to institutional investors
Retail investors are often interested in a variety of assets—like stocks, bonds, mutual funds, or even real estate—with the goal of earning income or building wealth over time. That said, they sometimes face limitations, like not having access to exclusive investment products or professional advice, which can affect their decisions and the returns they get.
Key aspects to consider
Even though retail investors have fewer resources than large institutions, easier access to financial markets has opened up a much wider range of investment opportunities. Online investment platforms and ETFs (exchange-traded funds) have made it easier for them to invest in assets that used to be reserved for institutional investors.
Retail investors often make decisions based on personal goals—like saving for retirement, paying for their kids’ education, or buying a home. That usually leads them to choose more conservative or long-term investments. But as they gain experience, some might branch out into riskier or more diversified options to try and boost their returns.
Even if their impact on the market isn’t as big as that of institutional investors, retail investors still play a key role in keeping the market liquid and dynamic.