A retail investor is an individual who purchases securities for his or her own personal account rather than for an organization. Retail investors typically trade in much smaller amounts than institutional investors such as mutual funds, pensions, or university endowments.
- Retail investors are non-professional market participants who generally invest smaller amounts than larger, institutional investors.
- Individual investors are thought to be less knowledgeable, less disciplined, less skillful, and more prone to behavioral and emotional errors than professionals.
- Despite their lack of knowledge, the retail investment space is enormous with individuals investing through retirement accounts, brokerage firms, online trading accounts, and roboadvisors.