Victor Rigoni III is a wealth management advisor who covers investment news and developments in various financial markets. We caught up with Mr. Rigoni to get his take on millennial investing habits, are they even investing at all, and what about “Gen Z”?
Investment platforms have expanded within the last decade as cryptocurrency became a phenomenon and social media became a pivotal method for spreading information on financing opportunities. People now as young as 18 years old are becoming more conscious and aware of investment trends rather than splurging it on the latest trending gadgets or newest clothes in the market.
However, these young investors, which include both Generation Z (ages 18 to 24) and Millennials (ages 25 to 40), are not just benefiting from easier access to the stock market and other financial instruments- they are changing the way everyone invests through their non-traditional habits.
Here are some of the latest Millennial and Gen Z investing trends in 2021 and what they mean for the future.
Unconventional Investing Strategies
Gone are the instances where young people approach financial advisors or professionals to manage their investments. Millennials and Gen Z investors are turning to online resources when looking for investment information. A
survey found that 33% of Gen Z and Millennial investors belong to at least one online investment community or forum, while 23% of them belong to multiple.
Gen Z is more social media-oriented. They rely on sites and platforms such as YouTube, TikTok, and Instagram for their investing information and tips. These investors prefer to indulge in investments that are popular among their peers.
While Millennials do rely on such platforms for information, they give more importance to the historical stability of stocks and assets than Gen Z. They rely on investing websites for their investment information and tips.
However, the reliability of resources used by both these groups is different. That's because the importance of data sources differs between Millennials and Gen Z. Millennials have proven to stick to their guns, seeking sound advice. Gen Z are further risk-takers, avoiding tested advice.
However, despite the difference in their sources, there isn’t much difference in the type of assets both parties invest in.
Increasing Mainstream Acceptance of Cryptocurrency
There has been an increasing number of Gen Z investors attracted to cryptocurrency and blockchain technology in recent years due to its anonymity, security, and freedom.
Despite being one of the riskier investments that can be made due to its infancy, these investors see cryptocurrency as a viable alternative to fiat money. This arises from their distrust in the government and other traditional institutions.
On the other hand, Millennials are more cautious. They prefer to invest in assets that vary in design, such as stock and bonds, compared to cryptocurrency. However, they are more likely to invest in cryptocurrency than in index funds or mutual funds.
Additionally, both parties are likely to invest in stocks that provide dividends compared to investing in emerging stocks like SPACs. But Gen Z might be more willing to invest in meme stocks (AMC, Blackberry, and others) rather than traditional blue chips, whereas Millennials would invest in the latter.
Investing in Technology and Sustainability
It should come as no surprise that both Millennials and Gen Z embrace today's technology, including electronic devices, software, and even sustainable solutions. As a result, both generations have raised their bets on this asset.
An astonishing finding is that nearly half of Gen Zs invested in the financial sector despite all the hardships faced by their families during the various financial crises.
However, even though both generations give high importance to the financial sector, Millennials were found to provide the same level of importance to the informational technology sector. Gen Z has proven to prefer betting on high-tech or emerging technology instead of taking the safer options of energy and industrial.
The difference in style does not stop there. From the time Gen Zs were born, the world has been moving toward sustainability, including more attention to recycling, increased global warming research, and widespread awareness of alternative fuels and sources of food. This has sparked an interest in betting on assets that are considered unique.
Due to their sentimentality with saving the world and making it a better place for them to live in, these investors have been actively investing in companies that provide more sustainable living standards, such as Tesla and Beyond Meat.
Millennials are slowly catching up to this trend thanks to the guilt they feel from the younger generations. However, they adopt a different style, such as impact investing, which allows them to invest in more sustainable companies by getting the result they want for the risk they take.
Key Takeaways
There's no denying that Millennials and Gen Z have very different habits than their predecessors. Instead of mutual funds, these young investors are interested in breakthrough blockchains, cutting-edge technology, and sustainable energy.
Even though the importance of assets differs between both groups, the overall goal is the same: to earn a return from their investments, and it makes them have more in common with previous generations before them than most people think.
