Gen Z investors are taking more risks, picking up bad investing habits in the hunt to get rich quick, survey finds
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- Gen Z investors are aiming to use market opportunities and make short-term profits, a Barclays survey found.
- They trade often, take bigger risks and track their portfolios closely - habits criticised by investing experts.
- At the same time, so-called 'Finfluencers' are sharing stock and investment strategy tips for fast, high returns.
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Gen Z investors are all about making quick gains. They trade more frequently, they take on more risk and are picking up other traditionally 'bad' investment habits in the process, a Barclays survey found this week.
"Over a fifth (21 per cent) of Gen Z investors say they are investing to take advantage of the market and 16% plan to 'play the markets' to get rich quick," the survey found. Most Gen Z investors additionally planned to dissolve investments within five years, according to Barclays.
Over the past year especially, Gen Z investors have also become more prone to taking risks when investing - almost a third of survey respondents admitted to this.
"The last year has also seen younger investors pick up investing habits that are traditionally viewed as unfavourable," Barclays noted. As well as an increased risk appetite and investing more speculatively, the survey found that Gen Z investors traded more frequently and monitored their portfolios more often and closely.
Gen Z, or "zoomers", are generally understood to be those individuals born roughly between 1997 to 2012, to so-called Gen X parents.
Older generations were found to be more focused on long-term goals, like purchasing real estate, when investing and had not become significantly more susceptible to risk over the past year.
Throughout the COVID-19 pandemic and alongside the corresponding rise in retail trading, a new type of social media influencer has emerged - and it's one that appeals to Gen Zers. "Finfluencers", or financial influencers, are especially popular on TikTok, where over 45% of all US-based users are of Gen Z age, according to statista.com.
The hashtags '#FinTok', '#StockTok', '#finance' and '#investing', which are commonly used by influencers who share finance- and investment-based content, have almost 7.5 billion views between them. The type of videos posted under these tags however varies greatly.
On the one side, there are finfluencers that use their platform to provide financial education, fight back against sexism that still exists within the world of finance and investing, or show how they use cryptocurrencies to make purchases.
On the other side, many accounts promote specific stock investments or strategies - often leading with a promise of quick and high returns if users follow the approach. Videos with titles like "Stocks that will make me rich by 2022", "Three penny-stocks ready to take off this week" or "How to retire at 22 years old" seem to dominate financial hashtags when scrolling through TikTok.
Crucially, finfluencers rarely are qualified financial professionals. Instead, they are often just dipping their toes into the investment waters as well. Many clarify this on their profiles, but this does not seem to stop audiences from following their advice and strategies.
A recent Motley Fool survey showed that social media buzz is the fourth most important factor in deciding whether to invest in a certain stock or not among Gen Z investors - highlighting just how influential finfluencers can be and how significant a role they play in young investing.
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