Retail investors had been outperforming the market since May. Not any more.

Retail investors had been on a roll, outperforming the broader market by as much as 10 percentage points over a two-month stretch that ended in July. This was a notable trend, especially considering that retail investors often trail behind institutional investors and professional money managers. Their recent outperformance was likely due to a combination of factors, including the surge in individual stock picking and the use of trading apps that have made it easier for retail investors to participate in the markets.

However, it appears that this trend has come to an end. The fact that retail investors are no longer outperforming the market may be a sign that the recent market volatility has caught up with them. As the market environment changes, retail investors may be struggling to adapt their investment strategies. This could be due to a variety of factors, including a lack of experience with market downturns or an over-reliance on momentum stocks.

Looking ahead, investors will be watching to see how retail investors respond to the changing market environment. Will they be able to adjust their strategies and get back on track, or will the recent market volatility continue to pose a challenge? Fund managers and investors will also be keeping a close eye on market trends and sentiment indicators to gauge the overall direction of the market and identify potential opportunities and risks.

Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.