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What does 'Mom And Pop ' mean

"Mom and pop" is the term used for businesses and companies that are independently owned and run. These types of businesses are much smaller and sometimes have difficulty competing with larger businesses' buying power.

"Mom and pop" can also refer to inexperienced investors who play the market casually and rely on brokers to manage their portfolios.

BREAKING DOWN 'Mom And Pop '

"Mom and pop" is usually the term given to stores or businesses that are much smaller and independent than larger corporations. Historically, this term used to refer to the local general store or drugstore, because it was often run by family members and passed down from one generation to the next. Now, a mom-and-pop shop could refer to a number of different businesses, such as a restaurant, a local bookstore or an auto repair garage. It could even refer to a small, family-owned insurance company.

Many mom-and-pop stores could not compete with larger size and convenience of bigger box stores during the 1980s and 1990s and had to shut down. Similarly, several mom-and-pop restaurants have a hard time competing with fast food joints and franchise restaurants that serve food faster and at lower prices.

Mom-and-Pop Shops Make a Comeback

Mom-and-pop businesses are in vogue again, especially with the help of the internet. Many consumers want to support local businesses and small businesses. Mom-and-pop business owners can operate their businesses primarily online without the overhead cost involved with operating from a brick-and-mortar storefront. Consumers' desire for something unique and of high quality has also driven mom-and-pop businesses back to success. Mom-and-pop shops also tend to have a more personal feel and a higher level of commitment to their customers that is hard for larger businesses to replicate, due to their nature and size.

Mom-and-Pop Investors

"Mom and pop" can also refer to a type of investor. Mom-and-pop investors are inexperienced and typically invest very little in shares. Despite not putting a lot of money up front, mom-and-pop investors still expect to receive a large return or to supplement their income with the profits from their efforts in the stock market.

Mom-and-pop investors typically buy and sell their stocks through a broker. While this approach can yield some profit, the actual mom-and-pop investors do not keep up to date with their market research and do not move quickly enough when the market changes. Usually, these mom-and-pop investors are the most effected when the market falls dramatically.

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