Retail investors have made a major contribution to the global recovery by buying shares in companies like Amazon, Apple, Facebook and Netflix, the Financial Times has reported.
The article quotes an article in the FT that cites a study by Goldman Sachs that found that retail investors have been buying $2.6tn in the US stock market since the start of the recession in 2007.
Goldman Sachs said in its study that the US retail market is now worth $1.5tn, but that retail is far from the only sector to have benefited from the recovery.
“While the overall recovery in the economy has been good, there are many sectors where investors have had a boost, from real estate to technology, from retail to health, from technology to health services,” said David Faull, the FT’s managing director of research.
“So while there are winners and losers, the retail sector has been particularly strong.”
The FT also said that the retail investor market is not solely responsible for the recovery and that retail stocks are actually outperforming the broader market.
It quoted Morgan Stanley as saying that retail investing had grown to $1tn by the end of 2018, which is still far from being the total number of shares purchased, but it is an increase of more than $1bn.
“If you look at the bigger picture, the growth is more than offset by the growth in the stock market,” Morgan Stanley’s research director David Vavreck told the FT.
“This is a market that’s growing faster than any other sector, and it is not just about buying retail shares.
It is a big part of what’s driving the recovery.”
The retail investors that helped boost the US economy and have been investing in the market since 2007, the report said, were people who had no previous experience in retail.
The retail investor is a very important player in the American economy because of the role they play in creating jobs and helping to support the economy, Vavreks said.
“The retail investment community is a highly-motivated community,” he said.
“They are the one group that is actively trying to get people into the workforce, and the retail investment is a key driver of job creation.”
The US stock markets have been in a long-term decline, but have rallied by almost $200bn in recent months.