A good chunk of retail has been long the market all along ( buy and holders of index based mutual funds or etfs). It would informative to see the net inflows and outflows of money by year on these types of investments.
My guess, a lot of speculators lost their shirt the last few years shorting the market or equities against trend. There was a time on here when that's all you read, I remember posting that most bull markets last 4-5 years minimum and a bunch of jokers on here were saying the S&P was going to 660 again, and that we weren't in a bull market !!!
A certain amount of retail might have given up on markets in 2008 and won't come back. A lot of young people don't have reliable income, so that's another impact on retail, less risk takers wanting to speculate on frothy moves.
But we'd need to study the flow of money to know.
I agree that it would be most useful to study the flow of money by investor type.
Well if what you say is true that a good chunk of retail has been in since the lows of 2009 then doesn't that make them the 'smart money'?
Those who have been in for the last 4 or 5 years are sitting on some nice profits and they are going to have to offload their shares to someone at some point, but who? The young people as you say don't have reliable incomes so it can't be them. Can it?
One possible scenerio is no 'dumb money' shows up and some catastrophic unforseen event occurs. A mad rush for the exit ensues which would see massive illiquid liquidation of stocks at much lower prices as the professional money is trying to offload to proffesional money.
Has anyone else thought about this?