Retail traders set new record for cash inflow into stock market in 2025

Retail traders in 2025 broke their own records more than once with a flood of cash into the stock market, outpacing all previous years by 53%.

The so-called “Dumb Money” came back and took the wheel, all without its king Roaring Kitty, whose last appearance was in January right before Trump’s inauguration.

Armed with real conviction and a strategy that ran counter to Wall Street’s panic, these guys outperformed, outplayed, and outlasted the pros.

Retail traders bought $3 billion in one day during Trump tariff panic

Everything turned the week of April 2, when President Donald Trump hit the global economy with a fresh wave of tariffs he branded “liberation day.” The S&P 500 tanked. Big funds bailed. But retail went straight in. They bought over $3 billion in stocks on April 3 alone, even as the market plunged nearly 5%. They kept buying the next day, through another 6% drop, according to VandaTrack.

Seven days after Trump’s announcement, on April 9, he put most of the tariffs on pause. The S&P 500 shot up 9.5%, and those same retail traders were already in position. Since April 2, the index has gained more than 21% and is on track to end the year up 17%.

“We often talk about retail as being sort of late to the party,” said Viraj Patel, deputy head of research at Vanda. “But this has been the polar opposite.”

Mark Malek, chief investment officer at Siebert Financial, said, “They’ve been much more accurate in their dealings than my colleagues in the institutional space.”

Retail traders also leaned hard into what Zhi Da, a finance professor at the University of Notre Dame, called the “TACO trade,” short for Trump Always Chickens Out.

The strategy is simple; we buy when Trump policies tank the market, expecting him to reverse course. It has worked literally every single time, so that helped dumb money a lot.

JPMorgan’s quant analyst Arun Jain called it a “successful year” for retail investors, thanks mostly to how quickly they bought during drawdowns, while Bespoke Investment Group called 2025 the “second-best year for dip-buying since the early 1990s.”

Starting in May, many small investors turned their attention from individual names to ETFs. One of the biggest winners was the SPDR Gold Shares (GLD) fund. Retail poured so much money into it that 2025 inflows beat the last five years combined. Gold soared, and GLD finished the year up over 65%.

The payoff was clear. Retail’s stock portfolios delivered higher profit-to-loss ratios than JPMorgan’s own AI and software baskets. Their ETF holdings outperformed both the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ).

This year, while a few meme names like OpenDoor popped up again, most cash flowed into Tesla, Nvidia, and Palantir, the top performers of the past 5 years. No drama. No games. Just chasing winners and cashing out right.

Retail participation in Wall Street hits highs not seen even in the GameStop saga

Retail’s surge is part of a movement that started during the pandemic with the legendary appearance of Keith Gill, the man Google has nicknamed “the greatest retail investor in the world.”

In 2024, over one in three 25-year-olds had already moved big chunks of money from checking accounts into investments by the time they turned 22.

Compare that to just 6% in 2015, and you’ll see what we mean. JPMorgan said retail trading jumped over 50% from last year and beat the 2021 meme stock mania by 14%. Retail’s share of total trades returned to levels last seen during the GameStop short squeeze.

A working paper by researchers at Chapman University, Boston College, and the University of Illinois Urbana-Champaign found that retail activity this year rivaled 2021’s peaks. But the story’s different now. Pete Davidson’s “Dumb Money” film captured the old attitude, and now that attitude’s been replaced.

Patel said, “The average retail investor’s just becoming more and more sophisticated.” More access to data. More understanding of timing. More accurate plays.

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