The rapid decline of the retail trader
Individual investors rushed headlong into markets during the pandemic. Now, they're nowhere to be seen.
After piling in during the pandemic, Australia’s army of retail investors has gone missing. The number of trades on share trading platform Selfwealth plummeted 43% over the last financial year, with the ASX-listed trading platform blaming the decline on “slowing economic conditions, high inflation and rapid increase in interest rates”.
Its annual report shows investors have been lured out of equity markets by increasingly attractive savings rates, with customers withdrawing $280 million in cash from the platform, or 38% of total balances, over the last 12 months.
It's not just Selfwealth being impacted. A marked decline in trading activity can be seen right across the market as once busy individual investors sit on the sidelines.
Compared to the busiest days of 2020, the number of trades have now halved, according to NAB director for investor behaviour Gemma Dale.
