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The rising involvement of retail investors has been an intriguing trend during the pandemic, culminating in the surge and slump of GameStop shares.
As an industry, we worry about the disconnection of individual investors from financial markets, the hubs of wealth creation. Direct ownership of shares by individuals has been declining for decades. For that reason, the growing fervour for stock investing that had been growing throughout 2020 should be welcomed. The more recent encouragement of novice investors to buy wildly inflated stocks, however, should not.
For many, GameStop shares will be the one and only time they buy a stock, left only with a memory of their part in the “angry bubble” and a stinging loss. I worry about the risks being taken at a time when wealth and health is already a pressing concern.