• According to Investopedia, there are ten main types of penny stock investors: (1) experienced penny stock traders, (2) corporate insiders, (3) hedge funds, (4) short sellers, (5) newsletter writers, (6) investor relations firms, (7) market makers, (8) speculators, (9) ordinary investors, and (10) inexperienced and unwary investors. There were no details on how investors break down by income.
• According to Business Insider, in 2019, retail investors made up about 10% of the market, but that has increased to as high as 25% in the COVID era. On average, retail investors currently account for about 20% of stock market activity. Of note, penny stocks are generally traded in the OTC (over the counter) markets and would not necessarily be included in these statistics.
• OTC Markets group provides information on close to 10,000 OTC securities. They reported that the total value of their securities in 2018 was $375.2 billion.
• Seeking Alpha published an article in 2018 discussing the risks and returns for penny stocks, but there was no data on who the investors are.
• Reporting by CNBC indicates that some penny stock investors are college students, but there is not indication of how many or what percentage of the total investors they represent.
• Although this study was published in 2016, it is being included due to the lack of more current data. The study highlighted data from an earlier study that found "OTC investors tended to be older, wealthier, and considered themselves more experienced at investing." This study, which used zip code data as a proxy to determine who the OTC investors were, found that "OTC investors tend to live in areas with individuals who are younger, more educated, and wealthier, and have greater income and residence stability."
• The study also reports that retail investors are the primary investors in OTC stocks, and also that there is little data on OTC investors.

Summary of Findings

• Our initial research found that there is very little on the demographics of penny stock (or OTC stock) investors. The only data found was from a 2016 study, and that did not provide specifics on income.
• We do not believe that further research will uncover the requested data.