A new study shows that despite recent ridicule by Wall Street professionals that small retail investors have become “hyperactive,” “addicted to risk” and “hopelessly irrational,” as a group they have outperformed the market. This according to a recent MarketWatch article by contributor Mark Hulbert.

The study examined trades over the three-year period from mid-2018 to August 2020 at Robinhood, the online retail brokerage firm, then constructed a hypothetical portfolio that weighted each stock according to the number of Robinhood accounts that owned it.

The article reports that, over the period studied, the hypothetical portfolio beat the S&P 500 “both in raw unadjusted terms as well as after risk adjustment.” It adds that during that same period, 71.9% of domestic equity funds underperformed their benchmarks.

Hulbert notes that it is hard to write off these results to a “pure expression of irrational exuberance” by the small investor. Even if some investors do in fact behave irrationally, Hulbert points out that the “collective wisdom of the crowd is often superior.”

He concludes, “Keep that in mind the next time you hear a Wall Street guru insist that small  investors who frequent platforms such as Robinhood don’t know what they’re talking about.”