Five years after the GameStop mania, retail investors have become a force Wall Street can't ignore

Core Insights - The influence of retail investors has proven to be more durable and long-lasting than expected, reshaping trading dynamics and pushing hedge funds to adapt [1][2] Retail Investor Participation - Retail trading participation in U.S. equities has risen to nearly 20% of daily trading volume, up from low single digits before the COVID-19 pandemic [4] - On high-volume days, retail participation can reach close to 40%, and in options trading, it can be as high as 50% [5] Market Dynamics - The retail investor community has become a persistent force in equity markets, providing a steady source of dip-buying flows that have supported one of the longest bull markets on record [2] - Hedge funds have learned to respect retail investors, who can mobilize capital quickly and influence market movements [10][11] Evolution of Retail Investors - Retail investors are now more informed and engaged, utilizing various tools and resources to make investment decisions [8] - The democratization of access to markets and information has significantly changed the landscape for retail investors [9] Wealth Transfer and Future Trends - A significant generational wealth transfer is expected, with millennials and Gen Z set to inherit approximately $120 trillion over the next 20 years, potentially increasing retail participation [16][17] - Brokerage firms are adapting to cater to younger investors, offering 24/7 trading and access to cryptocurrencies and private market offerings [17] Cultural Impact - The GameStop saga and the rise of meme stocks have left a mark on popular culture, influencing media representations such as the film "Dumb Money" [6][7]