Dumb Money
pronunciation: /dəm ˈmənē/
noun
A term used in retail investing to describe individual investors who trade stocks, often driven by trends, emotions, or tips, rather than expert financial advice or careful analysis. Typically contrasted with institutional investors, who have more resources and experience.
During the GameStop short squeeze of January 2021, dumb money went from being a derogatory term for retail investors to a powerful force in the market. Reddit’s WallStreetBets forum drove a surge in GameStop stock, causing massive losses for institutional short-sellers. In a matter of days, dumb money showed Wall Street that even untrained, small investors could shake the system to its core.
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