Newer generations are more open to the world, more open to risk than their older peers, and start investing younger than any past generation. With technology intervening in our lives, investing is now easier than ever. Younger generations are now able to invest from the comfort of their homes with a click of a button. For instance, a quarter of U.S. Gen Z investors born between the late 1990s- early 2000s, began investing before their 18th birthday, according to CFA Institute and the FINRA Investor Education Foundation. So, what are their favorite investment tools?
Younger generations are very aware of the importance of portfolio diversification and of the planet. Therefore, they invest in different tools. More than half of Gen Z investors invest in cryptocurrencies, around 41% of them invest in equities, and 35% invest in mutual funds. While compared to earlier generations, Gen Z and millennial investors are more likely to hold stock options, especially those focusing on ESG but are less likely to have a retirement account, according to CFA Institute. Unlike Millennials born between the early 1980s and late 1990s, Gen Z is less likely to own exchange-traded funds (ETFs) and mutual funds, they are more likely to own stock options. They also focus on long-term returns more than short-term ones, according to the same study.
Shiny metal also has its share among them. Gold remains a safe haven for all, with a 38% increase in demand from Generation Z and 29% from Millennials during 2022 in the UK, according to Royal Mint, the United Kingdom's oldest company and the official maker of British coins. Mint experienced a significant increase in the volume of gold investments last year, with an annual increase of 26%. Similarly, investments in gold bars saw a substantial increase of 33.5% during the same period.
With the increase in living costs all over the globe, many people, regardless of their age, are taking a scathing stance on investments and saving tools and increasing their awareness of the diverse available choices.
The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.