Gen Z and Millennial Investors: Ranking the Most Used, Trusted Investing Tools The Motley Fool

The Motley Fool recommends holding investments for at least five years, through market volatility. The larger stock market is made up of multiple sectors you may want to invest in. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. “While you may be tempted to sell for any number of reasons, such as market volatility, you need to remain a passive investor if you want to earn the index’s long-term return,” he wrote.

For example, almost 200,000 users were holding very complex United States Oil ETFs in the days after it crashed in April. “Why were younger investors drawn into volatile commodity tracker funds, despite repeated warnings from regulators that these risky products were unsuitable for retail investors? Millennial respondents are nearly twice as likely than Gen Z and Gen X to own crypto and almost five times as likely as baby boomers. That tracks with studies done by Investopedia and Charles Schwab showing cryptocurrency is more popular among millennials than any other generation.

gen Z expect from trading platforms

Keep in mind that owing to the pandemic, most Gen Zers are living in a time of significant political, economic, and social upheaval. They also face lower purchasing power than most previous generations, as a result of stagnating wages and growing inflation. The FINRA Investor Education Foundation supports innovative research and educational projects that give underserved Americans the knowledge, skills and tools to make sound financial decisions throughout their lives. Two in five Gen Z investors in the U.S. (41%), Canada (41%) and the UK (43%), and almost two in three (60%) of Gen Z investors in China cited ‘FOMO’ (fear of missing out) as a factor in their decision to start investing.

As in previous years, Gen Z and millennials respondents show slightly more interest in ESG stocks and REITs than older generations, but not by much, and those types of stocks don’t make up a large part of their portfolios. Other surveys show that younger investors are more likely to align investments with their values, even if it comes at the expense of returns. The proliferation of smartphones and easy access to the internet has empowered this generation to engage with financial markets through mobile trading apps. These apps offer intuitive interfaces, real-time data, and simplified trading processes, aligning perfectly with the Gen-Z preference for seamless digital experiences. Beyond ensuring financial profitability, Gen Z seeks a social element in their financial engagements. The rise of “influencers” on social media platforms indicates a segment of Gen Z that craves engagement and community in financial literacy and investments.

gen Z expect from trading platforms

This generation’s commitment to making a positive impact extends to their investment choices, where financial gain is only one part of the equation. When in need of investment advice, the majority (54%) defer to a financial advisor, trailed far behind by news reporting and opinions (16%) and family (14%). Of the Gen Zers who invest, 55% are primarily invested in cryptocurrency, 19% of investing Gen Zers hold only cryptocurrency assets, 41% have money in individual stocks, and 35% invest in mutual funds.

gen Z expect from trading platforms

The economy needs energy across sectors to run smoothly, making these companies potential buys. A previous survey suggests that the fear of missing out, or FOMO, might play a role. This integration of online and offline experiences is of paramount importance for a contemporary omnichannel plan of action — just what Generation Z expects. Whether a Generation Zer steps into a bank or goes online, the experience has to be just as hassle-free, streamlined, and similar.

Roughly 70% of Gen Z and millennial respondents say they make a trade at least once a month, compared to 50% of Gen X and just 24% of baby boomers. Just 12% of respondents said that a high-performing portfolio should include more than 20 different investments. Energy, healthcare, real estate, and utilities are also somewhat popular across generations, although millennials are more inclined to invest in healthcare and real estate stocks than other generations. The most common types of stocks owned by Gen Z and millennials — as well as older generations — are growth stocks, value stocks, and large-cap stocks. We found that Gen Z and millennials share some commonality with each other and other generations when it comes to how large they think a high-performing portfolio should be and what factors to consider — and ignore — when weighing an investment.

“That’s why boomers love IBM, Procter & Gamble, and Pepsi – they’re companies they grew up with.” Bank of America also highlighted the rise of Gen Z as a key theme that all investors should be watching. 59% of Gen Z investors are willing to admit that they’ve traded while drunk — but the group still outperformed the S&P 500 over the last year, according to a new report. Pinterest saw an “emerging contribution” in the first quarter from third-party partnerships, which are ramping and complementing “the really strong growth” in the first-party ad demand, Ready added on a post-earnings call. Tether, the issuer of the USDT stablecoin, has inked a partnership with blockchain surveillance company Chainalysis to monitor its token transactions on secondary markets.

  • They led the retail investment revolution, embrace new investing services and tools, and are digital natives more comfortable accessing different sources of information to guide their investing strategies.
  • While they are generally more risk-averse than their Millennial counterparts, Gen-Z investors are not afraid to venture into higher-risk investments if the potential for substantial returns is present.
  • The joint Finra-CFA Institute report doesn’t specify the average share of Gen Z investors’ portfolios allocated to cryptocurrency.
  • All generations are dismissive of follower count and how many posts an account has when determining whether it’s a good source of investing intel.
  • Exxon rose 34 places to become the 27th-most held stock by Gen Z investors, according to Apex’s report.

Gen Z, wielding an estimated $140 billion spending power in the United States alone, emerges as a pivotal consumer segment in FinTech due to its rapid demographic expansion worldwide. Recognizing and capitalizing on this opportunity by delivering innovative, tailored offerings is crucial for both neobanks and traditional banking institutions, especially as we look toward 2023 and beyond. “They view crypto as just another asset, a way to generate yield,” he said. Gen Z have also embraced stocks like Coca-Cola, Costco, and Pepsi because they pay out regular dividends, according to Capuzzi. “Energy stocks went up pretty significantly as war in Europe propelled oil to new highs,” Capuzzi said. “It’s pretty striking to have this young cohort buying Chevron or ExxonMobil. It shows that they’re savvy and that they have access to information.”

And given that the vast majority of millennials and Gen Zs have been using their smartphones more due to the coronavirus outbreak, it’s unsurprising that the time spent on apps like these has also increased. Dividends and the potential for short-term gains are either the second- or third-most-important factor, depending on the generation the respondent is part of. For example, baby boomers and Gen X care more about dividends, while Gen Z prioritizes hopes of short-term gains. Conviction that an investment will generate long-term returns is the most important factor for all generations of respondents when considering how to grow their money. For Gen Z, millennial, and Gen X respondents, a user-friendly interface is the most important factor in an investing app.

gen Z expect from trading platforms

Accessing investing content on social media is also free; there are no subscription fees required. Older generations find social media less trustworthy than younger generations, and generational preferences toward social media platforms are apparent in the survey responses. Those factors are still important for younger generations but less so, perhaps because they expect these features from most investing apps. Many of the best investing apps have no fees and seamlessly connect to most banks. The eagerness to participate in cryptocurrencies represents a major opportunity for FinTech companies.

Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment. In late 2022, nearly half (44%) of Gen Z who didn’t invest said they couldn’t due to limited funds. Coinbase’s chief legal officer, Paul Grewal, told CNBC there’s an “absence of clear rules for the digital asset industry,” which ultimately “hurts companies like Coinbase that have a demonstrated commitment to compliance.”

Many millennials and Gen Zs are diving into trading complicated financial instruments without fully understanding the risks. And as well as the potential for devastating losses, this can also come at a tragic human cost. Alex Kearns, a 20-year-old Robinhood trader died by suicide after seeing an unexpected $730,000 negative balance on his account, which he didn’t understand and may have only been temporary. “We see a lot of buying activity of specific industries that were impacted by the pandemic,” said Robinhood co-founder Vladimir Tenev, as reported by CNN.

For millennials and Gen Z, and Gen X to a lesser extent, social media is probably the easiest way of accessing information that previous generations are more familiar with. Instead of watching a financial analyst discuss a company’s earnings on TV, they may watch the same clip on YouTube or read an analyst’s take on Twitter/X. For Gen Z respondents, author credentials and expertise is the most important factor when it comes to assessing the reputability of a new source of investing information. Information on stocks, investing strategies, and built-in research tools and analytics are of middling importance for respondents across generations. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation.

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