Half Of Gen Z Is Involved In Investing

According to a recent poll, over half of the consumers aged 18 to 24 are now interested in trading or investing in financial markets, as aspirational wealth building becomes more popular in Gen Z pop culture.

Australians under 45 are more interested in trading and investing since the coronavirus epidemic started, according to an October study of 1005 Australians by foreign currency broker Global Prime.

Survey respondents from Generation Z were more enthusiastic than Millennials (ages 25 to 34) and consumers in general, with 42% saying they were on board, and 31% saying they were on board. Men are more likely than women (38%) to be interested in trading and investing (24 percent).

In contrast to his colleagues and social media influencers, Mr. Kinstlinger, Global Prime director and co-founder, who is based in Bondi and manages the 10-year-old company with fellow FX trader Elan Bension, cautioned first-time investors against following "unreliable [investment] advice."

Companies have been warned by the Australian Securities and Investments Commission (ASIC) not to rely on personal finance bloggers to market their goods online, and this statement is in response.

If you're going to depend on social media advice, Mr. Kinstlinger suggests novice traders remember the golden principles like being "realistic about returns on money," preparing transactions ahead of time to prevent gambling-style urges and finding an experienced trader to teach you.

What About Gambling?

This practice of contracts for difference (CFD) brokers trading against their clients to benefit from their losses, known as "B-booking," was also something Mr. Kinstlinger advised new traders against. For their protection, he urged that they inquire about trade receipts.

To find out which bank completed your deal, ask your broker whether they use any form of the tracking system.

However, Glen James, a former financial advisor, and presenter of the My Millennial Money podcast noted that consumers should be aware that trading and investing are fundamentally distinct behaviors, despite the survey's inclusion of both terms.

For those who want to make money long-term via trading, "Trading is not investing, and the statistics are against you," he stated.

The former entails making short-term profits by purchasing and selling securities in response to changes in their price. As a result, dividends and other income are paid to the owner of the securities over the long term.

When it comes to riskier, short-term trading tactics, Mr. James argues that young investors have plenty of time to make up for whatever losses they incur by diversifying their portfolios and investing in other asset classes.

Gen Z And Millenials As A Growing Force In Investing

This generation has greater economic power than any generation before it, contrary to common assumptions. Leaders are justified to be worried about this generation's economic power. More money is being earned and saved than in past generations, as well as invested early and at a greater rate than ever before. Only 9% of baby boomers and 14% of Gen Xers began investing before the age of 21, compared to 31% of millennials. Millennials, together with Gen Z and women, will be the recipients of tens of billions of dollars in wealth transfer that is now taking place in the United States.

Moreover, one-fourth of all millennial savers have accumulated a nest egg exceeding $100,000. When they invest that money, they have different goals in mind than their parents did: They want to invest their money in a way that is good for the environment and people. When a corporation isn't doing what's best for society or the environment, more than half of this group says they've sold their shares. This enthusiasm for ESG investment has helped fuel the 10x rise in ESG inflows in only two years, which is a remarkable achievement.

If we include women of all ages, the influence of these younger generations on the financial industry is considerably greater. When it comes to capital allocation, they share many of the same views as their counterparts in Europe.

It's not an evolution, but rather a revolution, that these investors want to see in the financial industry, which has been making slow but steady progress on several important topics they care profoundly about. Financial professionals are well aware of the exclusion that prevails in the industry, and they've seen the effects of this reality firsthand.

Despite clear-cut research from McKinsey, Deloitte, and Boston Consulting Group demonstrating women-led enterprises tend to beat their rivals financially, and diverse teams outperform not only financially, but also in areas such as innovation, this is still the case. Only 2.2 percent of venture money was invested in female-founded businesses in 2013. Also, the next generation is keeping a close check on how organizations invest in progress and diversify their boards and C-suites in terms of sustainability and diversity commitments and activities.

There is a tremendous deal of worry about how to best appeal to young investors among wealth counselors, bankers, fund managers, and others in the financial industry. Ernst & Young found that as many as 70 percent of women and millennial/Gen Z investors are likely to terminate their family's financial advisers when the wealth transfer comes their way. For others, this is essentially a death sentence for their firm.