How AI & Retail Investors Are Changing Wall Street

Now from traditional stocks to crypto and onto prediction markets, retail investors have a lot of options these days, and they also have many options when it comes to picking a brokerage or a trading app.

The good thing is though that retail traders have long big tech the past few years and have been prudent about dip buying.

So joining me is Ana Insana, co-founder and head of growth, and David Mack, founder and CEO of Upside Invests.

Guys, good morning.

Thank you guys so much for joining us today.

It's great to be here.

Great to be here.

Thank you.

So Anna, let's go ahead and start with you.

So for someone hearing about Upside for the first time, what So our mission is to provide everyday investors with collective intelligence.

So Upside lets retail investors anonymously benchmark their portfolios against a whole community of real verified investors so they can see how they're doing not only against the market but against other investors like them.

And we're essentially just trying to put the wisdom of the crowd into the hands of everyday investors.

That's great.

And David, question for you, what problem are you guys trying to solve for everyday investors?

So we're now entering into an era where retail investors have tripled in their volume in self-directed volume from just 10% of equities markets to 30% of equities markets, and younger generations of investors really like ourselves are coming into $70 trillion of wealth transfer and right now, like you just mentioned.

They're being bombarded by meme investing options, prediction markets, and there's all of this noise.

There's AI on top of that, but no one is actually just showing investors what real people are actually doing.

So Upside solves that by just giving people an avenue to share their real portfolios with each other and then see the real behavior behind the noise.

All right, so Anna, break it down.

How does it actually work?

Yes, so users will log on.

They'll create a free profile, and from there they can link their brokerage through Plaid.

So it's just the industry standard.

Venmo uses it.

Robinhood uses it, and we anonymize everything, so investors, dollar amounts, names, or net worth will not.

Be revealed and so they get a randomly generated user name and then they enter the platform and they are benchmarked against the entire community and like I said it is completely anonymous so we have a whole leader board that surfaces retail investors' return versus their risk so you can see who's actually performing the best out of the entire community.

So David, uh, uh, this is, this is a very specific question.

So what makes Upside different from other social investing apps because like we mentioned, there's so much out there right now.

We have AI, we have like just a bunch of noise.

So what makes it different?

Yeah, definitely.

So if you take a look at a lot of the social investing apps right now, they're focused on more of the social aspect of like who has the biggest follower count, who can copy each other, where you're like finding an influencer, and then therefore you don't actually know behind the scenes if this person is just better at getting followers versus actually they're a better investor.

Upside really sort of starts from a clean slate, which is it's not about your identity or about your personality.

It's just about your.

Portfolio and your actual behavior, so we're super transparent about what your actual performance is both on a raw returns and a sharp adjusted basis and we harness that energy to give you context that you've never had before.

So if you think about fitness or salaries or career planning, like just even 5 years ago you couldn't have context around what other salaries or job titles your friends had or how fit they were, how fast they were at running, or even before Waze, you weren't Sure where there were accidents or where there were speeding cameras, and so you have all that collective intelligence in other areas.

So why not for retail investing for investors' portfolios.

So Anna, a question for you, how do you guys use AI differently because everyone's using AI and it is the talk of the town right now.

So how do you guys use it differently?

Yes, so we're really seeing people use AI for investing in two main ways.

So they're using it on the research side where AI can read filings really quickly and hand that information back to people extremely quickly, but That comes with a lot of noise and then on the other side there are people using it to actually execute trades for them and what we're seeing is that there's this massive gap in the middle where you're not taking into account actual retail behavior and since we have all these portfolios available we can use AI to kind of fill that gap.

Where you're not only just doing the research and doing the execution, you have along in the middle what real investors are actually doing, and that's another layer of information that's extremely important and valuable to the everyday investor.

All right, David, to wrap this up, so where does this go long term?

What's the future?

Kind of walk us through what you guys are looking at 5, 10 years from now.

Yeah, definitely.

So seguing off the AI point is AI is looking for intelligence beyond just the regular like market data, the pricing data, the fundamental research data, and AI is building to try to understand sort of the reality of how people behave, what their preferences are.

And so this community really helps people by giving AI and pointing it at their portfolios to give them value and help them understand themselves.

In the long run as our community grows, we just launched this year and we have thousands of investors on the platform already.

We're imagining a world where this community represents what Main Street is actually doing, what are the most popular stocks.

So for example, we can actually prove that 1 in 3 people hold Nvidia and we can show you if they're buying the dip or not.

And as the community gets larger and it becomes a real representative sample of what Main Street investors are doing, we think it can create a new type of index.

AI powered index selecting the behaviors of the best investors in a basket of securities almost similar to the S&P, the Dow or the Nasdaq, but instead of listening to a bunch of institutional researchers at the S&P telling you what 500 stocks you should buy, you can actually just see collectively what Main Street investors actually want to do.

As, thank you guys so much for joining us.

Interesting to see what's going to happen.