Retail Investors and Market Resilience: What the Data Shows

Retail Investors and Market Resilience: What the Data Shows

Knowing which stocks or sectors have higher retail ownership can provide a real edge during times of market volatility.

But don’t just take our word for it.

A recent study co-authored by economists at the Federal Reserve Board and the Universities of Virginia and Zurich used VandaTrack retail data to explore how investor behavior shapes market dynamics.

Here are a few key takeaways:

- Retail data from Vanda Research are well-aligned with data coming directly from retail brokerages, but are more detailed and arguably more representative of the average retail investor.

Investor positioning plays a critical role in understanding market crashes — institutional investors tend to amplify price declines.

- In contrast, higher retail participation is associated with more resilient share prices during periods of market stress.

These findings reinforce what we’ve long observed through our real-time VandaTrack data: retail positioning provides valuable insight into market behaviour and stability.

Read the full paper here: https://lnkd.in/dgxfZK8A