Chart of the Day: More Professional, Less Individual

Today’s Chart of the Day from S&P Global shows the overall market share owned by individuals. For equities, it started at nearly 95% in 1945 and has dropped to only 40% as of today. The data suggests the other 60% of the investments are made through market professionals through things like mutual funds and exchange traded funds (ETFs). The level also decreased for corporate bonds and treasuries, from 30% for both in 1945 to only 3% and 10%, respectively.

What does this mean? The theory is that as more and more of the market is traded by market professionals, who have more resources and complex systems at their disposal, it is increasingly difficult for individuals to compete and outperform.