How ‘dumb money’ took over stock markets: $5.4 trillion of retail activity took place in 2025

For years, retail investors were dismissed by some on Wall Street as “dumb money.”

That typically referred to those prone to trading on hype, or chasing trends rather than company or industry fundamentals, or responding late to big market moves.

That’s no longer the case. An analysis of where retail investors put their money last year shows they outperformed two of the most popular, professionally managed index funds, SPY and QQQ, whose goal is to mirror the performance of the S&P 500 and Nasdaq 100, respectively.