GameStop mania fed off angst among young investors, experts say

The GameStop stock frenzy and the retail trading revolution it created five years ago were fueled in part by a financial malaise among younger investors, according to experts. That generational unease has lingered and may have long-term effects on retail investors and the broader stock market.

Retail investors bid up shares of GameStop, a brick-and-mortar video game retailer, by more than 1,600% in January 2021, as amateur traders on Reddit’s WallStreetBets online message board urged each other to pile into the beleaguered stock and leveraged nascent digital investment platforms to place trades.

Hordes of young people in their late 20s and early 30s started participating in the stock market for the first time during the GameStop craze, said JJ Kinahan, head of retail expansion and alternative investment products at Cboe Global Markets, a securities exchange.

“It was quite honestly the greatest event that ever happened for retail trading in the markets,” Kinahan said.

Just two to three years prior, he said, a common question among financial firms was: How do we get young people to invest?

“We didn’t think they’d all come in at once,” Kinahan said.

Investing had largely been the purview of big institutions, such as asset managers and pension funds, until around the GameStop and “meme” stock era.

While other factors like widespread adoption of zero-commission trading and ample time at home during the Covid-19 pandemic helped draw new retail investors into the market, GameStop’s impact was undeniable, experts said.

About 4.5% of investors who traded GameStop stock opened a brokerage account on or after Jan. 13, 2021, when the GameStop mania began, which shows it attracted “several” new investors to the market, according to academic research published in 2021. Those investors tended to be younger — in their early 30s, on average, compared to age 36 for non-GameStop traders — and less-experienced.

The paper, by financial researchers Tim Hasso, Daniel Müller, Matthias Pelster and Sonja Warkulat, used data from an unidentified retail broker.

In another paper, Jill Fisch, a business law professor at the University of Pennsylvania, called the GameStop frenzy in January 2021 “perhaps the highest profile example of the reemergence of capital market participation by retail investors, a marked shift from the growing domination of those markets by large institutional investors.”

That participation had staying power, experts said.

Individual investors accounted for about 30% of equity trading volume in September 2025, up from about 21% to 22% at the beginning of 2020, according to data from Rosenblatt Securities.

“The volumes have been crazy,” said Cboe’s Kinahan.

One popular narrative is that retail investors who joined the GameStop phenomenon did so as a revolt against Wall Street.

By banding together and raising the stock prices of so-called meme stocks — including GameStop and other companies like AMC — retail investors triggered huge losses among short sellers like hedge funds that had placed bets against such companies.

Researchers said it may very well have been the first case of “predatory trading” among retail traders, whereby a coordinated decision not to sell shares early pushes up the stock price — and, potentially, profits.

While there was likely a “stick it to the man” element underpinning the mania, some experts said investors were more motivated by a sense of being economically left behind.

Instead, it appeared to be a quasi-referendum on the financial malaise eating away at Generation Z and millennials, they said.

“Our research … suggests that the behaviour of social retail traders is not simply about a revolt against finance, or irrational risky bets,” wrote Richard Whittle and Stuart Mills, behavioral economists at the University of Salford and the University of Leeds, respectively, in a 2024 piece for The Conversation. “It is about how today’s stock market reflects a new generation of investors, facing economic pressures which are quite different to those of previous generations.”

Whittle and Mills, along with research co-author Gavin Brown at the University of Liverpool, studied posts on the WallStreetBets Reddit forum, finding that the average person in the WSB community required a return of at least 36% to feel satisfied with their investment — much higher than the 10% historical return for stocks.

In other words, rather than taking a “dumb money” approach to the stock market, they felt a need to gamble and earn a high return to strike it big and catch up, Mills told CNBC.

“If you have the expectation you’ll be at least as wealthy as your parents, and suddenly the cost of housing is much higher than your parents’, the cost of education is much higher, you’re probably feeling a lot less wealthy than your parents at that time in their lives,” he said.

So, why would investors funnel their angst into GameStop stock?

It was likely a combination of the theoretical promise of infinite returns, the “meme” of betting on a physical retailer during a global pandemic and a youthful nostalgia for the brand, Mills said.

The GameStop saga is also representative of a broader “gamblifying” of investing and society, financial experts said.

“Today’s do-it-yourself retail traders increasingly view speculating in financial markets, sports books and prediction markets as a side hustle, requiring little capital outlay for potentially big rewards, amid deepening income and wealth inequality that is souring the prospects of younger generations,” Justin Schack, head of global market structure at Rosenblatt Securities, wrote in an e-mail.

Indeed, individuals who traded GameStop stock — aside from being young and relatively inexperienced investors — also had a history of engaging in risky trading, including in lottery-like stocks and securities with high volatility, according to the research by Hasso, Müller, Pelster and Warkulat.

“Speculation is in our DNA,” said William Bernstein, author of “The Four Pillars of Investing.”

There are also parallels between GameStop stock and other volatile assets like cryptocurrency, which is owned overwhelmingly by young investors, experts said.

But GameStop is perhaps the “poster child” of young investors turning to financial markets to “fix” their economic ills — and being able to do so with ease given the proliferation of mobile apps and no-commission trading, said Eric Robbins, a certified financial planner and associate director of corporate outreach and research at Penn State Behrend.

Unfortunately, such a strategy could blow up in their faces — as is often the case for investors who try to time the stock market, Robbins said.

For example, while some investors reaped “significant” profits with GameStop, those who arrived late to the party suffered big losses, Hasso, Müller, Pelster and Warkulat found. The median investor who bought in after Jan. 25, 2021, for example, lost about 13%, they wrote.

Young investors have an outsized sense of investment risk, he said. They started investing after the 2008 financial crisis and have largely only seen “gangbusters” returns, Robbins said. The only substantial downturn since then — the pandemic-era crash in 2020 — was short-lived, he said.

“I suspect that, so long as people continue to feel as though their standards of living are falling, and that their financial aspirations cannot be achieved via conventional means, we will continue to see retail investors pouring into different, and more exotic, assets,” Mills said.

From a psychological perspective, taking a risk and losing may not feel like a big deal for young investors who already feel as if they’re falling behind, he said.

It also isn’t generally the best way to build wealth, experts said.

“Ask any finance professor and you’ll get the same boring answer: The best way for most people to invest in the long term is to hold a diversified portfolio of stocks,” Nobel laureate Richard Thaler, a behavioral economist at the University of Chicago, and Owen Lamont, now a senior vice president at Acadian Asset Management, wrote in a 2023 New York Times op-ed about the GameStop saga.

On the other hand, the GameStop frenzy fueled an unprecedented interest in the stock market among young investors, who may not otherwise have taken an early interest in wealth-building, said Cboe’s Kinahan.

They also have many decades on their side to course-correct if they make a mistake, Bernstein said.

“They’ll learn their lesson,” he said. “There’s nothing like getting hit upside the head by a financial two-by-four to change your mind.”