In a new report, FINRA's Investor Education Foundation ("Foundation") reviewed the types of investment accounts opened during the COVID-19 pandemic and the types of investors who opened them.

The Foundation found that market volatility following the COVID-19 pandemic was accompanied by a spike in retail investors entering the markets by means of taxable, non-retirement investment accounts. The Foundation explained that, based on the report's sample, new investors tended to be younger, more ethnically and racially diverse, and earning lower incomes than those of experienced entrants and holdover account owners.

Commentary

Some of these investors, maybe most of them, may lose money in the short run. But it would be a great thing if they came away from it with a little more financial sophistication. The regulators should consider how best to provide education through social media.

Primary Sources

  1. FINRA Press Release: New Research - Global Pandemic Brings Surge of New and Experienced Retail Investors into the Stock Market
  2. FINRA Report: Investing 2020 - New Accounts and the People Who Opened Them

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