retail investor

A market participant who makes personal investment decisions or employs someone to make personal investment decisions for them. The other type of market participant is the institutional investor, who makes financial decisions on behalf of an organization—such as a mutual fund, exchange-traded fund (ETF), bank or pension fund. Retail investors (individual investors) execute their trades through traditional or online brokerage firms or other types of investment accounts and tend to trade in small amounts that are dramatically different than the scale at which institutional investors operate. Individual investors can employ strategies that institutional investors cannot for long-term portfolio success. Retail investors are tracked for their market sentiment, measured by fund flows and the first-day performance of initial public offerings.