I’ve always been a little dubious about labels for generations: pinning the name Baby Boomer on a band of people around the world and then blaming them all for the ills of the world seems a little unfair to me. Equally, though, I don’t buy into the labelling of millennials as lazy (or as eaters of avocado toast). Those are certainly not characteristics of the millennials I have worked with. As for Gen Z – I have a fine young teenager in my house and its not apparent to me that any label at all fits him. But it seems that there is one thing people under the age of 34 might have in common, and that’s a tendency to dabble in day trading. A survey conducted in the US suggests that young people have been exploring the market more since the Covid-19 pandemic began. More than half of Gen Z and millennial investors say they’ve been trading more often, compared with just a 30% increase for the general population, the survey shows. I can’t say that is true of the Gen Z person in my house – but that’s because he doesn’t have any money. I have no doubt he’ll be day trading as soon as he can lay his hands on enough cash. – Renee MoodieÂ
Gen Z and Millennials really are trading more in the Covid era
By Sarah Ponczek
(Bloomberg) –Â For those imagining the commonplace 2020 day-trader as a young adult equipped with a smartphone and some cash, those suspicions may be right. A study shows the under-34 crowd has increased its trading during the pandemic at a rate far higher than that of the broader population.
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More than half of Gen Z and Millennial investors said they’ve been trading more often since the Covid-19 pandemic began, compared with just a 30% increase for the general population, according to a quarterly survey conducted in early July and released by E*Trade Financial Corp. on Wednesday. At the same time, 46% of younger investors said they’ve traded derivatives more frequently, double the average rate.
“Access to the market has never been easier,” said Chris Larkin, managing director of trading and investment product at E*Trade. The study sampled 873 self-directed investors who have at least $10,000 in an online brokerage account.
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Retail investors have grown into an undeniable force this year, driven to stock-trading by zero fees and boredom with little else to do during the pandemic. Individual investors now account for 20% of equity trading, according to an analysis by Bloomberg Intelligence’s Larry Tabb, making them the second-largest group of investors in the market.
The influence these small fry have on security prices is debatable, but Wall Street has been captivated by the outlandish nature of some of their most prominent and daring trades – from airlines and cruiselines hit hard by Covid-19 to bankruptcy stocks including Hertz Global Holdings Inc.
According to the E*Trade survey, 51% of Gen Z and Millennial respondents said their risk tolerance has increased since the coronavirus outbreak – compared to 28% for the total population. The younger generations have also been deploying cash into new trades at a rate that’s almost twice as high as the broader investing base.
To contact the reporter on this story: Sarah Ponczek in New York at [email protected]
