Summary

Over the past 18 months, U.S. securities markets have experienced dramatic volatility. At the same time, individual investors entered the markets in unprecedented numbers—often through self-directed accounts at online brokers—drawn in part by reduced barriers to entry, such as low- and no-commission trading and the ability to purchase fractional shares. Increased retail market participation can benefit individuals by potentially encouraging higher levels of savings and wealth accumulation—and it can benefit the markets in the form of greater liquidity.