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Rising US retail stock trading will draw modest reform

Thursday, March 4, 2021

Significance

Late-phase bull equity markets invariably spawn a new generation of novice, casual traders. The surge in popularity of free stock trading apps such as Robinhood, combined with the growth of investing-focused social media channels, is influencing retail investment in a particular way this time around.

Impacts

  • Institutional investors will continue to drive the overwhelming majority of stock trading activity.
  • Attempts to use the GameStop short squeeze to introduce a financial transactions tax will advance, but not far.
  • Unprecedented access to more sophisticated financial information and trading tools will make retail investors more active investors.
  • Digital financial apps ('robo advisors') that use artificial intelligence to manage individual investors' assets will continue to grow.

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