Who are retail investors?

Retail investors are individuals who invest their personal funds in various financial securities, such as stocks, bonds, and mutual funds, primarily for personal financial goals rather than as part of a business. This category includes everyday people who operate independently and are typically purchasing investments for long-term objectives like retirement, buying a home, or funding education.

The distinguishing feature of retail investors is that they do not pool their funds or invest on behalf of others. They do not manage large amounts of capital like institutional investors, and their investment acumen can vary widely from novice to experienced. This definition specifically aligns with the characteristic of individual investors managing their accounts and making personal investment decisions for their own benefit.

In contrast, large organizations, corporate entities, and institutional buyers represent different segments of the market that engage in investing at a larger scale and often have different objectives and regulations. These entities typically engage in investment strategies that require a much higher level of capital and often operate under distinct regulatory frameworks compared to individual retail investors.