Core Insights - Retail investors have shown unprecedented enthusiasm in the U.S. stock market in the first half of 2025, injecting a record $155.3 billion into individual stocks and ETFs, marking the highest amount for this period in history [1][4]. Group 1: Retail Investor Behavior - Retail investors maintained a strong preference for "buying the dip," with increased participation in individual stocks, particularly high-beta and leveraged products [3][8]. - The top stocks favored by retail investors in 2025 include Nvidia, Tesla, and Palantir, with Nvidia leading the pack, followed by Tesla and Palantir, which saw a significant rise in popularity [3][12]. - Retail investors exhibited aggressive buying behavior during market pullbacks, with a net inflow of $100 million for every 1% drop in the S&P 500, indicating a strong bottom-fishing trend [8][10]. Group 2: Market Dynamics - The influx of retail funds was initially driven by the "American exceptionalism" narrative, followed by aggressive buying during significant market corrections [4][10]. - Daily trading volume increased by 44.5% in 2025 compared to 2024, setting a new record for retail participation [6][17]. - Retail investors have shifted their focus from broad-based leveraged ETFs to individual stock products, with a notable increase in the flow of single-stock leveraged ETFs [15][17]. Group 3: Performance Metrics - Retail investor portfolios have performed in line with the S&P 500, with a return of 6.2% in the first half of 2025, only slightly trailing the Nasdaq index by about 2% [17][18]. - Cumulatively, since 2024, retail investor portfolios have achieved a return rate of 40%, significantly outperforming the QQQ and S&P 500 ETFs [18].