05/05/2022
Term of The Day - Retail Investor
A retail investor, also known as an individual investor, is a non-professional investor who buys and sells securities or funds that contain a basket of securities such as mutual funds and exchange traded funds (ETFs).
Retail investors execute their trades through traditional or online brokerage firms or other types of investment accounts.
Retail investors purchase securities for their own personal accounts and often trade in dramatically smaller amounts as compared to institutional investors.
Retail investors usually buy and sell trades in the equity and bond markets and tend to invest much smaller amounts than large institutional investors. However, wealthier retail investors can now access alternative investment classes like private equity and hedge funds.
Because of their small purchasing power, most retail investors may have to pay higher fees or commissions for their trades, although many brokers have eliminated fees for online trades.
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