Welcome to the Consumerization of Investing
Reading this as a European who grew up and lived in the US for many years - it's amazing how far behind Europe is on almost all of the topics mentioned above. Most of the companies mentioned in this article are only available to US based and/or even accredited investors. Only this year have Robinhood clones started to become popular and accessible in Europe. Platforms like Forge, Masterworks & co. simply don't exist here or are still tiny. The opportunity that is in either US companies expanding and/or simply copying these over to the market here is massive.
Could not agree more. The shift of new platforms and asset classes is an underrated opportunity for online investors (accredited + non-accredited). It's awesome to see private equity shops open up online channels for smaller investors as well!
It may be ambitious to assume that retail traders are buying stocks for much more than making money. Buying stocks because you like the company may work until you are losing money. Will retail investors using these platforms hold onto shares if they lose 30% just because they get entertainment from investing and feel like they have achieved a new level social status? Time will tell. At the end of the day, prices are still set by professional investors and if those prices turn against someone with a couple grand in Zoom I would bet that human behavior kicks in.
An impressive article as usual with a lot of research and subsequent analysis evidently going into it. The limited basket of asset classes seems to be really opening up to include newer assets available at a click. The success of those asset providers will open up a new wave of startups in the rest of the world, especially Asia and India where I live.
I agree with you in many opinions of your article. But if you think that the 2020 rise is thanks to retailers, you are very wrong. Many of the stocks most loved by retailers are down between 50% and 80%. This has not been caused by retailers. It has been the Market Makers backed by big banks that have manufactured the big lie of 2020.
Really thorough Packy. One thing that doesn't click for me though with Common Stock: how will they incentive enough of the "Top Investors" to join the platform and post their portfolios, trades and commentary? Without that dynamic addressed the community won't grow - as only so many traders/investors can follow a single "Top Investor" before alpha/outsize returns are affected. I believe eToro, which also has a "copy trade" model, does this by paying the "Top Investors". Thanks for any feedback!