GenZ Wants to Invest

We conclude that GenZ: 

  • Is very open to investing 
  • Prefers to invest small sums at one time but sizeable in total
  • Prefers to be embedded in communities when investing
  • Likes to invest per app
  • Is prone to Fomo 
  • Is interested in climate change topics
  • Has an activist streak 
  • Prefers to combine purpose and profit
  • Use crypto as an on-ramp to investment (and not vice-versa)

We also see that investment barriers are slowly lowered to accommodate investors with smaller tickets. 

Signals: 

While most of the signals are based in the US, the report by CFA also states that they found very similar numbers in Canada and the UK. A main difference is found in China where limits of crypto transactions push GenZ investors to other vehicles. 

 “The Gen Z population is diverse and digitally savvy. They are using mobile technology to enter the financial markets in unprecedented numbers and consulting a wide range of information sources as they do so. It is vital to understand their investing decisions and to provide them with the educational tools to prepare for those decisions.”, Gerri Walsh, president of Finra

Open to invest

“Close to six in ten, (56 per cent) of U.S. Gen Zs ages 18 to 25 report owning at least some investments. Two in ten (19 per cent) are currently invested in cryptocurrency and/or non-fungible tokens (NFTs) only.” CFA Institute

“Most US Generation Zs aged 18–25 do invest, and many began investing before their 18th birthday. Cryptocurrency is often their gateway into the financial markets, and investing apps rank highly as their preferred method of managing investments and making trades.”, CFA Institute

Apart from retail investors, GenZ is professionalizing their investment ambition to become angel investors. This is naturally a group for potential partnership for Marabou.  

Small investments

“Other factors attracting Gen Zs to invest are the ability to invest with small amounts, the popularity of cryptocurrency, the fear of missing out (FOMO), and substantial influence and assistance from family members.”, CFA Institute

The most common reasons Gen Zs cite for not investing are:

  •  I don’t have enough savings (65 per cent);
  • not enough income/living from paycheck-to-paycheck (64 per cent);
  • I don’t have enough knowledge about investing (56 per cent); and
  • I am focused on other expenses (51 per cent).

U.S. Gen Z investors over 18 invest a median amount of $4,000, though some subgroups invest less than others. Gen Z women have less invested than men ($3,000 vs. $5,000 median), and Gen Z people of color have less invested than white investors ($2,000 vs. $5,000 median).

Crypto as an on-ramp

Gen Z investors are most likely to have started by investing in crypto (44 per cent), followed by individual stocks (32 per cent) and mutual funds (21 per cent). Gen Z investors report a median amount of $1,000 currently invested in crypto, which is one-fourth of their median total investment of $4,000

Note that while we recognize (and will use) GenZs first investment with crypto, Marabou does not define itself as crypto. We define crypto as every token without real-world value. Opposed to that there are so-called Real World Assets – an underlying value (a share, a certificate of ownership) that is merely tokenized for easier access. 


Use of apps

Risk taking

They are risk-takers, with almost half (46 per cent) willing to take substantial or above-average financial risks.

They take more risks because they are confident in reaching their goals and in their abilities:

“They are fairly confident in their knowledge about investing. Almost half (48 per cent) say that they know more about investing than their parents, and one in three (33 per cent) are extremely or very confident in their ability to make investing decisions.”

Source of investment information

Sourc

Trading often

As can be seen in the following statistics, GenZ trade much more often than for instance Gen X or especially boomers. 

The importance of ESG factors in investment choice

When making purchasing decisions, Gen Z investors rank Environmental, Social, and Governance (ESG) qualities highly on their list of considerations, with over half (51%) saying how ethical trading, equality, diversity, and a brand’s environmental sustainability have become more of a factor in how they buy clothes, accessories, and shoes over the last 12 months. This 51% of Gen Z outnumbers the 26% of Millennials.

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