A trader works as a screen displays the trading information for GameStop on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
The GameStop stock frenzy and the retail trading revolution it created five years ago were fueled in part by a financial malaise among younger investors, according to experts. That generational unease has lingered and may have long-term effects on retail investors and the broader stock market.
Retail investors bid up shares of GameStop, a brick-and-mortar video game retailer, by more than 1,600% in January 2021, as amateur traders on Reddit’s wallstreetbets online message board urged each other to pile into the beleaguered stock and leveraged nascent digital investment platforms to place trades.
Hordes of young people in their late 20s and early 30s started participating in the stock market for the first time during the GameStop craze, said JJ Kinahan, head of retail expansion and choice investment products at Cboe Global Markets, a securities exchange.
“It was quite honestly the greatest event that ever happened for retail trading in the markets,” Kinahan said.
Just two to three years prior, he said, a common question among financial firms was: How do we get young people to invest?
“We didn’t think they’d all come in at once,” Kinahan said.
Growth of retail investors in GameStop era
Investing had largely been the purview of big institutions, such as asset managers and pension funds, until around the GameStop and “meme” stock era.
While other factors like widespread adoption of zero-commission trading and ample time at home during the Covid-19 pandemic helped draw new retail investors into the market, GameStop’s impact was undeniable, experts said.
About 4.5% of investor
that the behavior of social retail traders is not simply about a revolt against finance, or irrational risky bets,” wrote Richard Whittle and Stuart Mills, behavioral economists at the University of Salford and the University of Leeds, respectively, in a 2024 piece for The Conversation.”It is indeed about how today’s stock market reflects a new generation of investors, facing economic pressures which are quite diffrent to those of previous generations.”
It was quite honestly the greatest event that ever happened for retail trading in the markets.
JJ kinahan
head of retail expansion and alternative investment products at Cboe Global Markets
Whittle and Mills, along with research co-author gavin Brown at the University of Liverpool, studied posts on the WallStreetBets reddit forum, finding that the average person in the WSB community required a return of at least 36% to feel satisfied with their investment – much higher than the 10% ancient return for stocks.
In other words, rather than taking a “dumb money” approach to the stock market, they felt a need to gamble and earn a high return to strike it big and catch up, Mills told CNBC.
“If you have the expectation you’ll be at least as wealthy as your parents, and suddenly the cost of housing is much higher than your parents’, the cost of education is much higher, you’re probably feeling a lot less wealthy than your parents at that time in their lives,” he said.
‘Gamblifying’ of society
So, why would investors funnel their angst into gamestop stock?
It was likely a combination of the theoretical promise of infinite returns, the “meme” of betting on a physical retailer during a global pandemic and a youthful nostalgia for the brand, Mills said.
The GameStop saga is also representative of a broader “gamblifying” of investing and society, financial experts said.
“Today’s do-it-yourself retail traders increasingly view speculating in financial markets, sports books and prediction markets as a side hustle, requiring little capital outlay for perhaps big rewards, amid deepening income and wealth inequality that is souring the prospects of younger generations,” Justin Schack, head of global market structure at Rosenblatt Securities, wrote in an email.
Indeed, individuals who traded GameStop stock - aside from being young and relatively inexperienced investors – also had a
Adversarial Research & Verification – Retail Investor Behavior & Market Trends (CNBC Article)
Here’s a breakdown of the verification process for the provided CNBC article excerpt, as of January 29, 2026, 18:58:41 GMT. This analysis focuses on factual claims and seeks to update them with current information.
Overall Status: The core themes of the article – increased retail investor participation,a search for alternative investments,and the risks associated with speculative trading - remain relevant as of January 2026. However, the specific context of the 2020 pandemic-era crash and the GameStop saga has evolved. Market conditions have changed considerably since the article’s original publication.
1. Pandemic-Era crash (2020):
* Source Claim: The article references the “pandemic-era crash in 2020” as a short-lived downturn.
* Verification: This is accurate. The initial market crash in March 2020, triggered by the COVID-19 pandemic, was exceptionally swift but followed by a remarkably rapid recovery fueled by unprecedented fiscal and monetary stimulus.
* Update (as of jan 2026): While the immediate 2020 crash is historical, the economic fallout from the pandemic continued to influence markets for several years. The initial recovery was followed by periods of volatility related to inflation, supply chain disruptions, and geopolitical events (including the ongoing conflict in Ukraine, which began in 2022). The S&P 500 experienced a correction in late 2022 and early 2023,but has since recovered and reached new highs. (Source: S&P dow Jones Indices – https://www.spglobal.com/spdji/en/indices/sp-500/)
2. Retail Investor Participation & “Exotic” Assets:
* Source Claim: Retail investors are pouring into “different, and more exotic, assets” due to feeling their standards of living are falling and financial aspirations are unattainable through conventional means.
* Verification: This claim was strongly supported by data during and immediately following the pandemic. Increased trading volumes in options, cryptocurrencies, and meme stocks (like GameStop) demonstrated a shift towards riskier assets.
* Update (as of Jan 2026): Retail investor participation remains elevated compared to pre-pandemic levels, but has cooled off from the peak seen in 2021.Cryptocurrency markets experienced significant volatility and a “crypto winter” in 2022-2023, leading to substantial losses for many retail investors. While interest in meme stocks has waned, they still experience periodic surges driven by social media sentiment. The rise of fractional share investing and commission-free trading continues to democratize access to the market. (Source: Investment Company Institute – https://www.ici.org/research/stats)
3.psychological Perspective & Risk Tolerance:
* Source Claim: Young investors who feel they are “falling behind” might potentially be less deterred by the risk of losing money.
* Verification: This aligns with behavioral economics principles.loss aversion is often lower for those who perceive themselves as already disadvantaged.
* Update (as of Jan 2026): Research continues to support this psychological dynamic.Studies show that younger investors are frequently enough more willing to take risks, particularly when they believe they have a longer time horizon to recover from potential losses. However,the consequences of these risks have become more apparent with the market downturns of 2022-2023.
4. Diversified Portfolio Suggestion:
* Source Claim: Experts (including Nobel laureate Richard Thaler) recommend a diversified portfolio of stocks as the best long-term investment strategy.
* Verification: This is a fundamental principle of modern portfolio theory and widely accepted by financial professionals.
* Update (as of Jan 2026): This advice remains valid. Diversification is still considered the cornerstone of sound investment strategy. though, the definition of “diversified” has broadened to include alternative asset classes like real estate, infrastructure, and private equity, particularly for high-net-worth individuals.
5. GameStop & Increased Market Interest:
* Source Claim: The GameStop frenzy sparked interest in the stock market among young investors.
* Verification: This is accurate. The GameStop short squeeze in early 2021 brought unprecedented attention to the stock market and trading.
* Update (as of Jan 2026): The GameStop saga remains a significant case study in behavioral finance and the power of social media. While the initial frenzy subsided, it contributed to a lasting increase in retail investor awareness and participation. Regulatory scrutiny of short selling and market manipulation has increased in response to the event.
**6. “hit Upside the Head”
