Market Research On Young Investors

Market Research on Young Investors
Business Report
22 Feb 2022
A Growing Demographic of Investors
There has been a note worthy rise in the number of young investors over the course of past few years.
Today's millennials and Gen Z are a growing force in investing. These new generations are driving their
capital to new frontiers, on new platforms, with new priorities. The financial sector recognizes that they
must begin to adapt accordingly or get left behind.
Millennials and Gen Z of this age, have more economic power than any generation that preceded them.
They are earning more, saving more, and investing earlier and at a higher rate than previous
generations. For millennials, 31% started investing before age 21, compared to only 9% of baby boomers
and 14% of Gen X. Not only are millennials the largest workforce in U.S. history but they, together with
Gen Z and women, are poised to be on the receiving end of a wealth transfer of tens of trillions of
dollars, which is already underway.
22% of Gen Z investors say they were younger than 18 when they started investing, versus 8% of
millennial investors. In fact, 40% of Gen Z investors say they were encouraged by their parents to begin
investing, which backs the earlier start.
Additionally, 22% of young investors trade stocks at least once a week. Even those who don't make
trades as frequently still do so on occasion, as 72% of investors 40 and younger say they trade at least
once a year.
Millennial men lead the way with larger investments, with 14% investing at least a $1000 a month,
compared with:
 10% of Gen Z women

 8% of Gen Z men
 7% of millennial women
Nearly a third of investors who received government stimulus money during the pandemic invested
some of it, according to a new CNBC survey. However, younger and newer investors were more likely to
put their stimulus money into assets. Of those aged 18 to 34 years old, 49% did so —15% invested in
individual stocks, 11% purchased cryptocurrency, 9% invested in mutual funds and 8% bought exchange-
traded funds.
Returns Utilization
Young investors aren’t typically focused on the long-term prize of retirement savings when it comes to
their investment goals. In fact, just 36% of young investors plan to use their investments to secure their
golden years and the majority plans to use their funds to make more investments or to make a big
purchase, like a house or a car.
Millennial investors are a bit more likely to focus on the long term, with 42% saying they’ll use their
investments for retirement, versus 25% of Gen Z investors. Gen Z investors are more likely to use the
money to pay for a major purchase (27%) than millennials (14%). In addition, 9% of all young investors
said they haven’t really thought about how they’re going to use their investment funds.
The Influence of Technology

Online is where it's at when it comes to young people looking for investment information. The survey
found that 33% of Gen Z (ages 18 to 24) and millennial (ages 25 to 40) investors belong to one online
investment community or forum where people discuss investing, and another 23% belong to more than
one. That's nearly 60% of investors 40 and younger.
While only 27% have sought advice from a financial advisor, 41% have gone to YouTube for investment
advice. Talking to friends and family (29%), TikTok (24%) and Instagram (21%) were other frequently-
reported sources of information among young investors. However, despite its overwhelming presence in
recent news cycles, just 13% reported using Reddit as a source for investment information.
Another survey conducted by CNBC, Thirty-five percent of 18-to-34-year-olds said they use social media
to look into possible investments, while 25% cited conversations with family and friends, and 24% said
financial guidance or investment websites. Only 7% said they gather research through direct discussions
with a broker or financial advisor.
Women Take the Centre Stage

The potential impact of these young generations on the finance sector is extraordinary, but even more
so if we factor in women across all age groups. Their economic power is also on the rise, and they share
many of the same perspectives on how they want to invest their capital .
In two thirds of affluent households in the United States, men are the key financial decision makers. But
this is about to change. Today, women control a third of total US household financial assets which is
more than $10 trillion. However, over the next decade, large sums of money are expected to change
hands, as an unprecedented amount of assets will shift into the hands of US women over the next three
to five years, representing a $30 trillion opportunity by the end of the decade. This is a clear indication
of how big of an opportunity this is in terms of attracting potential investors.
Morally Sound Investments

One in four millennials who save has more than $100,000 in savings. When they deploy that capital,
they are investing with a different set of expectations than their parents: 95% say they want to use their
financial capital for socially responsible investing. Two-thirds of this group own stock, and 57% report
that they have sold stock when they think the company is not serving the best interest of society or our
planet. Their passion for environmental, social, and governance (ESG) investing has helped drive the 10x
growth in ESG inflows in just two years. These investors are calling for the democratization of finance
that accelerates the plodding progress the sector has made on issues they care deeply about. They know
that the world of finance is not inclusive, and they’ve felt the consequences .
Despite their clear buying power, Gen Z and millennials have consistently expressed an honest concern
about their lack of knowledge and confidence when it comes to investing. For those in the financial
industry who embrace these changes, there is a real opportunity to support and guide this new
generation of investors who are willing to put their capital on the line to hold businesses accountable in
helping to shape a better society and a healthier planet.
Challenges
Investors younger than 34 surveyed by a financial services company said student debt, health care costs
and financial jargon are barriers between them and investing.
According to a recent study, 61% of the young investors said education costs, or paying down student
loans, are the biggest barriers to retirement, tied with health care costs (61%). Moreover, financial
jargon continued to confound, respondents said. Nearly three-quarters (74%) of the Gen Z and
millennial investors note that financial jargon hinders their ability to invest on their own. That was an
increase of 8% from last year’s survey.

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Market Research on Young Investors

 10% of Gen Z women

The Influence of Technology

Women Take the Centre Stage

Morally Sound Investments

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