For skeptics questioning how much further US stocks can climb after a blockbuster run, one of the market’s dominant forces remains decisively bullish: individual investors.
Retail traders have extended a buying spree into the new year, following a record-setting performance in 2025, an analysis from JPMorgan Securities’ Arun Jain shows. Purchases in the first four trading days of January hit the second-highest level in almost eight months, the firm’s data showed, while daily buying was consistently above the 85th percentile of observations, underscoring unusually strong conviction.
That confidence has helped stabilize markets during recent pullbacks. Considering the group’s growing influence on Wall Street, if retail traders keep snapping up equities, gains in the US stock market are likely to persist.
“Markets have been seemingly more driven by flows of funds than valuations, so — as long as individual investors are willing and able to commit money to stocks — that’s a positive sign for broad markets,” said Steve Sosnick, chief strategist at Interactive Brokers.
So far, the signal is flashing green. Since the start of the year, retail investors have bought about $10.1 billion of US equities — mainly via exchange-traded funds — far exceeding the 12-month weekly average of roughly $6.5 billion, JPMorgan data showed.
The renewed buying follows a banner year for mom-and-pop investors. Retail inflows in 2025 were nearly double the five-year average, surpassing the prior record set in 2021 by 17% and exceeding 2024 levels by almost 60%, the bank’s data show. December alone marked the largest monthly buying spree since the post–Liberation Day buy-the-dip episode in April.
The strategy paid off handsomely as retail reaped gains of more than 20% last year, according to JPMorgan, outstripping the performance of the S&P 500. Most of the windfall came in the first four months of the year, as individuals aggressively bought into three major selloffs — the post-DeepSeek correction, a momentum unwind in March and the Liberation Day meltdown — building roughly 75% of their single stock exposure in 2025.
Technology stocks dominated 2025 bets with retail chasing Nvidia Corp. and Tesla Inc. as shares rose 39% and 11%, respectively. Single-stock trading cooled starting in May, but ETF buying continued apace, helping to keep overall equity demand elevated.
Retail’s sway has been expanding. One in two US households own stocks and the percentage of households’ net worth tied to the stock market is over 30%, marking an all-time high, according to Barclays’ global head of equities tactical strategies Alexander Altmann. Citadel Securities said individual investors now account for 21% of trading volume in US stocks and roughly 60% of customer volume at Options Clearing Corp., the biggest equity derivatives clearing organization.
Still, its unclear how long small-time traders can keep investing as US consumers’ debt burden balloons.
“The buy-the-dip strategy has worked extraordinarily well for a wide swath of investors for a long period of time,” Sosnick said. “It’s reasonable to expect that it will remain a popular strategy until it stops working, as all ‘foolproof’ strategies eventually do.”
One notable shift was into precious metals. Retail investors bought more shares of SPDR Gold Shares ETF (GLD) in 2025 than in the prior five years combined, JPMorgan’s Jain wrote. The fund climbed about 64% in 2025, fueled by rising gold prices and heavy central-bank buying as heightened geopolitical risks stoked investor demand.
Retail enthusiasm has also spilled over into derivatives. Options activity rebounded sharply after a holiday pause, with individual investors buying call options in 35 of the past 36 weeks, according to Scott Rubner, Citadel Securities’ head of equity and equity derivatives strategy.
“The defining feature of retail activity in 2025 was persistent bullishness and after earning more than $20 billion in options on our platform over the course of the year, retail investors enter January armed with capital to deploy,” Rubner wrote in a note to clients Tuesday.
Citadel Securities expects that dynamic to continue this year, particularly in buzzy retail themes like quantum computing, robotics and automation, as well as space travel.
A message from Advisor Perspectives and VettaFi: Discover something new! Click here to register for our upcoming webcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
Read more articles by Natalia Kniazhevich
