There’s been a ton of talk lately about millennials and Gen Z – what they want, what they’re buying, and how they’re changing the world. But what does this mean for the investment world? Are there specific things that these generations are investing in? Do they follow any popular investing trends?
In this blog post, we’ll take a look at some of the things that millennials and Gen Z are investing in, and see if there are any trends worth noting.
So, what are Millennials and Gen Z investing in?
Well, one of the trends that we’re seeing is that more and more of them are investing in experiences instead of things. This includes travel, dining out, and other activities that can be enjoyed at the moment. If you own a small business that offers unique experiences, this is something to keep in mind!
Another one of the investing trends is that these generations are increasingly interested in sustainable investments. This could be anything from environmentally-friendly funds to companies that focus on social responsibility. For example, carbon credits have become a popular investment for those who want to offset their carbon footprint.
Finally, we’re also seeing a shift towards alternative investments such as cryptocurrency and NFTs. This is likely because millennials and Gen Z are comfortable with technology and are always looking for new ways to invest their money. Now, let’s go over some more trends emerging from the millennial and Gen Z investor groups.
They’re interested in buying stocks that pay dividends.
While millennials have been labeled as the “avocado toast generation,” it turns out that they’re actually quite savvy when it comes to investing. One of the investing trends of Millennials and Gen Z is that they are interested in buying stocks that pay dividends. This is a great way to earn a passive income.
This is likely because they’re always looking for new ways to make money, and dividend stocks provide a consistent stream of cash flow. If you’re a millennial investor, make sure to research companies that offer dividend payments!
Socially responsible investing is on the rise.
As we mentioned before, millennials and Gen Z are interested in sustainable investments. This includes anything from renewable energy to companies that focus on social responsibility.
For example, more and more young investors are choosing to invest in “green” ETFs, which track environmental, social, and governance (ESG) factors. This is a great way to make a difference AND grow your portfolio at the same time.
On top of investing for income, these younger generations are investing their money with brands that show sustainable efforts. Through technology, they can find and invest in companies that share the same values as them. Blockchain is enabling a new form of socially responsible investing. Whether it be consumable items or assets, this new technology is being used by younger generations.
Socially responsible investing (SRI), also known as sustainable, socially conscious, impact, or values-based investing, is any investment strategy that seeks to consider both financial return and social/environmental good to bring about a positive change. This is one of the many popular investing trends those in these generations seek.
They’re turning to tech-based solutions.
Millennials and Gen Z are comfortable with technology. So, it’s no surprise that they’re turning to tech-based solutions for their investment needs.
For example, many young investors are using robo-advisors to help them with their finances. Robo-advisors are online platforms that offer automated investing services. They provide a simple and convenient way to invest, without the need for a human financial advisor. Utilizing robo-advisors are one of the most popular investing trends of Millennials and Gen Z.
On top of tech-based solutions, tech investments themselves are becoming more popular. This includes anything from stocks in tech companies to investing in cryptocurrency. As we mentioned before, millennials and Gen Z are always looking for new ways to invest their money. And, with the rise of technology, there are more opportunities than ever before.
They’re comfortable with risk.
Millennials and Gen Z grew up during some of the most volatile economic times in recent history. From the dot-com bubble to the housing market crash, they’ve seen it all. As a result, they’re much more comfortable with risk than previous generations. This willingness to take on risk is reflected in their investment choices.
Of course, not all millennials and Gen Z investors are comfortable with risk. But, overall, we’re seeing a trend of young people who are willing to take on more risk than previous generations. This can also be due to the rising rate of inflation. With currency debasement, many young people are turning to alternative investments such as Bitcoin which has a capped supply.
Other investments that can also outpace the high rate of inflation are also causing this generation to flock to are real estate and farmland. With economic instability, these generations are willing to take on more risks if it means preserving their purchasing power.
Another one of the popular investing trends of these generations is equity crowdfunding. By investing in startups, millennials and Gen Z are playing a role in equity crowdfunding. Equity crowdfunding is a type of funding where people invest in exchange for equity in a company. This is different from traditional crowdfunding, where people donate money without receiving anything in return.
Through websites like FrontFundr and StartEngine, anyone can invest in a startup. Investing in startups is a risky proposition. But, for millennials and Gen Z, it’s a way to get in on the ground floor of the next big thing. And, it looks like many people from these generations are comfortable with these risks as mentioned before. Being able to get in early on a successful startup can lead to huge returns.
Investing Trends of Millennials and Gen Z – Summary
Whether you are a business owner or an investor looking to ride the next wave of capital inflows, it’s important to understand the trends that are shaping the investment landscape.
For millennials and Gen Z, these trends include a focus on ESG investing, a preference for tech-based solutions, and a willingness to take on more risk. Keep an eye on these trends as they are sure to shape the future of investing.
What does this mean for the future? Only time will tell. But, one thing is for sure, millennials and Gen Z are changing the investing landscape. And, they’re doing it in a big way.