Where young people are investing their money – and making a fortune
Now you understand how shares work, it’s time to start thinking about what companies you would like to invest in.
The good news is, that while some young investors are struggling to crack the property market, Gen X and Gen Y are leading the way in the stock market.
An article published on news.com.au says Gen X investors have lifted their international stock turnover by 91 per cent. Following closely behind them, Gen Y lifted theirs by 73 per cent in 12 months.
The data, compiled by the National Australia Bank’s investor arm nabtrade, found young investors are taking risks and choosing “higher growth assets” in “innovative fields” rather than those companies deemed “reliable”.
Nabtrade director of SMSF and investor behaviour Gemma Dale said in a statement: “Generally, younger generations have longer investment time frames, which allows them to pursue high growth assets, while Baby Boomers are opting for traditional blue chip names which offer reliable yields and have excellent long-term track records.”
It’s no surprise that Apple topped the list for both Gen X and Gen Y investors, but there were some differences between the two.
The Australian Financial review reports: “In the past year Gen Y invested in technology stocks in semiconductor company Advanced Micro Devices, technology company Nvidia and video game developer Activision Blizzard. Gen X gravitated to more traditional names such as Berkshire Hathaway, Barclays and Lloyds Banking.”
As for the shift in preferences, Dale said younger investors feel more comfortable with companies they have grown up with.
“So for us, it’s a new stock but for them, it’s not. It’s been around their whole lives and that’s quite fascinating, for them it’s part of their daily experience,” said Dale.
Additionally, Australian Prudential Regulation Authority chairman Wayne Byres said younger people trust these brands more than they trust banks.
“They wouldn’t have a clue about the four major banks that we have here … [and] as far as my kids are concerned, they have accounts with Apple.”
If you are thinking about buying shares as way to build your wealth in 2017, speak to one of our Financial Advisors or attend a short-course in Wealth Creation.
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