TORONTO, ON / ACCESSWIRE / October 15, 2021 / Ask any analyst and they'll tell you that knowledge equals money. While institutional investors rely on highly-trained analysts and expensive reports, retail investors are often left out in the cold when it comes to understanding and accessing alternative investment opportunities.
Even events like the GameStop rally, widely viewed at the time as a populist victory over Wall Street, generated significant profits for the big players thanks to their superior research and analysis capabilities. The four largest asset managers in the world who own 39% of GameStop shares achieved a $1 billion gain across the first 5 weeks of 2021 thanks to advanced tracking of social media conversations.1
Retail investors may have the odds stacked against them, but that hasn't stopped them ploughing significant capital into the stock market and other investment vehicles. In June 2021, JP Morgan reported that retail investors were on track to pour a record $1 trillion into stocks, up from their estimate of just $500 million for all of 2021 made at the end of choppy 2020.2 The rising tide of retail investment is testament to the growing financial clout of DIY investors and investment platforms like Robinhood.
Now the challenge is to match this democratisation of access with better availability of quality analysis for retail investors. In the words of Professor Bige Kahraman of Said Business School, private GameStop investors "were exploited not only because big investors are exploitative, but also because, even in a perfect market, they cannot compete with informed, sophisticated traders."3
To address this information gap, Delphia CEO Andrew Peek recently launched Alt Class, a new Substack newsletter. This free resource aims to equip retail investors with the in-depth analysis they need to accurately assess alternative investments. Designed as a weekly subscription newsletter, Alt Class will cover the whole alternative investments sector from a retail investor's perspective. Previous topics have included fine art and sneakers, with coverage of private equity, NFTs, and cryptocurrency in the pipeline for the coming weeks.
According to Peek, retail investors need to invest both their time and their money if they want to go beyond the traditional 60/40 stock-to-bond portfolio. "If you want to look at hedge fund-like strategies, prediction markets or fine art, for example," commented Peek, "it's a question of how much time do you have available and which of these things do you want to focus on?"
"Alternative investments all require significant research and understanding before you part with any capital. That's where Alt Class can help by providing regular updates and in-depth analysis on different alternative investments. We make it easier for retail investors to get up to speed faster and make investment decisions which are right for your portfolio."
Peek's company, Delphia, is an AI-powered investment platform that makes quantitative hedge fund strategies available to retail investors for free. Peek himself has a strong background in both investments and tech, having opened Shopify's Product Labs division after selling his last startup to the ecommerce behemoth.
"While hedge funds use machine learning algorithms trained on user data all the time," explains Peek, "there's nothing like that available for individual investors. We believe that by pooling data like Amazon purchase histories, Robinhood trading data, and social media activity from our members, we can build an algorithmic trading strategy that rivals the world's best hedge funds. Think of us as aspiring to be the first-ever investment advisor to let people invest their data alongside their money, in order to pursue better returns."
Delphia is a rare example of a firm rooting for the little guy, helping to democratise investing by sharing better quality analysis and investment strategies. Peek is confident that the efforts of companies like Delphia will "level the playing field", leveraging tech to help retail investors beat Wall Street at their own game.
- The Washington Post, "How the rich got richer: Reddit trading frenzy benefited Wall Street elite"
- Markets Insider, "Retail investors are on pace to sink a record $1 trillion into stocks this year - and the flows have actually accelerated over the past month, JPMorgan says"
- University of Oxford, "Retail investors are amateurs in a high-stakes market: they cannot win"