Since the 1980s, financial firms on Wall Street have increasingly relied on machines and algorithms to streamline trading and enhance their returns. Firms like Blackrock, State Street, Goldman Sachs, JP Morgan and others invested heavily in powerful computer hardware. They then aggressively recruited the top PhDs in math, logic, and computer science to design software to optimize trading results. By the 2010s up to 70% of all the trades on the New York and NASDAQ stock exchanges were executed by machine algorithms, with no human input other than the employee who wrote the code. As you might imagine, these firms are now using even faster machines, Artificial Intelligence, to assess risk and find inefficiencies in markets that they can exploit to gain a competitive edge. Further, these institutions are leveraging billions of dollars to make trades that move the market in one direction or the other. Given the size and influence of these institutional investors, it would seem that the small, retail investor can do nothing other than go along for the ride, hoping the big players don’t lead them off a cliff. But something strange happened as these machines became more powerful and ubiquitous. They gave the retail investor more influence than they ever had before. What began as a fringe phenomenon during the meme-stock mania of 2021 – when retail traders rapidly drove up shares of companies like GameStop and AMC – has now evolved into a more sustained and influential presence in markets. Analysts and market participants are saying that this shift is not temporary but indicative of a structural change in market participation. Retail investors, many of them day-traders or everyday savers, contributed a record amount of capital into stocks, ETFs, options, and other, less traditional, instruments during the year. According to a December 31, 2025 article in the Wall Street Journal, retail trades reached approximately 22% of overall trading volume in October, the highest level… | Read More »
Investing
Weathering storms
April in Wisconsin offers countless opportunities to develop life skills like patience and adaptability. A single spring day could feature a romp through all four seasons, with a couple of extras like gnat and lake fly seasons rolled in. The same daily forecast that allows daffodils to bloom can include measurable snow and a wind so brisk it hurts your face. So, you adjust. You wear layers you can remove when the frost burns off, and boots that won’t wilt in the ensuing mud. You prepare for any weather on any given day. Investing is like that too. Days that begin with sunshine and optimism can end with headwinds and dramatic dips. As inflation updates or corporate report nuances swing sentiment, markets react accordingly. Sometimes, they even act inexplicably in their initial runs. So, we build layers into our portfolios, some conservative allocations designed to protect and some more aggressive positions to take advantage of growth opportunities. We mine sectors and industries for long-term investment opportunities. Our investment team members understand both the seasons they face as portfolio managers, and the seasons our clients move through as they make their way to and through retirement. That understanding informs the investment decisions they make. Harry Chapin wrote about the seasons spinning round again and years that keep rolling by. It’s our job and our privilege as investment managers based in Wisconsin to understand and appreciate the swift passage and specific beauty of each fickle season. IMPORTANT DISCLOSURE INFORMATION Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Winch Advisory Services, LLC [“Winch”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated… | Read More »