Exploring the Resilience of Retail Investors: A Look at Build-A-Bear and Broader Market Trends
In a recent publication, we examined the 12 Best WallStreetBets Stocks To Buy According to Hedge Funds. Among those stocks is Build-A-Bear Workshop, Inc. (NYSE: BBW), which has garnered significant attention from retail investors. This article aims to evaluate how BBW stands in comparison to other popular WallStreetBets stocks favored by hedge funds.
The World Economic Forum (WEF) released its Global Retail Investor Outlook 2024, revealing a notable shift towards younger retail investors in the market. This extensive research, covering 13 different economies, indicates that a remarkable 30% of Generation Z individuals begin their investment journey in early adulthood. This is a striking contrast to just 9% of Generation X and a mere 6% of Baby Boomers who embark on investing at a similar stage in life. By the time they enter the workforce, an impressive 86% of Gen Z have acquired knowledge about personal finance and investing, in stark contrast to just 47% of Baby Boomers. Such figures highlight a significant generational transformation in financial habits and education.
Current Retail Investor Trends
According to the WEF's survey, retail investors are increasingly finding cryptocurrency more accessible and comprehensible compared to traditional investment vehicles like Exchange-Traded Funds (ETFs), Mutual Funds (MFs), stocks, and bonds. The research reveals that 29% of retail investors avoid stocks primarily due to a lack of understanding, whereas only 24% feel similarly about cryptocurrencies. Moreover, among younger investors below the age of 44 who are engaged in digital currencies, more than half allocate at least a third of their investment portfolios to cryptocurrencies.
The WEFs findings also indicate a shift in financial priorities among investors, with a growing focus on immediate financial needs. In 2024, 51% of investors are now prioritizing emergency savings, a sharp increase from 41% in 2022. Conversely, those emphasizing the importance of having enough savings to retire has dropped from 48% to 42%. Dean Frankle, Managing Director and Partner at BCG, emphasized that active participation in capital markets can significantly contribute to individual long-term financial well-being.
Retail Investors Continue to Pump Billions
A report from Bloomberg highlights the relentless nature of retail investors as they pour capital into the fluctuating US markets. Citing insights from JPMorgan Chase & Co.'s Emma Wu, the report notes that despite the ongoing strategy of 'dip-buying' during market downturns, many retail traders' portfolios are still struggling to reach breakeven. Nevertheless, the strategy of buying the dip amid trade concerns has been reportedly more successful than broader market trends.
Bloomberg further details that retail investors have invested a staggering US$11 billion into equities since April 2, coinciding with the Trump administration's announcement of reciprocal tariffs. This data, which reflects numbers up to April 9, 2025, illustrates the ongoing enthusiasm of individual investors. While retail investors are diving into the stock market, institutional investors are showing a tendency to move towards international markets and safer assets, such as Treasuries, signaling a possible shift in investment strategies among larger entities.