As the prospect of owning their own home becomes less of a reality, millennials are turning to the stock market to invest and build their wealth.
New insights from CommSec reveal more than half of all new customers are under the age of 35, with the number of millennial users over the past five years having risen 51% to now account for 28% of all active CommSec accounts.
In response to the growing interest from millennials, CommSec has halved online brokerage fees for small trades to make investments of $1000 or less more affordable.
The analysis also shows that many younger investors demonstrate a fondness for blue chip stocks with more stable share prices that pay dividends. However, some millennials are opting for growth stocks which could indicate a higher appetite for risk.
CommSec noted that this may also demonstrate a lack of understanding around the importance of diversification. Countering this, ETFs are also proving popular as they have accounted for 25% of all ETF trades via CommSec in 2017.
"Younger investors have embraced online share investing as a means to take control of their finances and save for their financial goals. However, it's important that new investors understand the risks and benefits of the share market and that they are making informed investment decisions," CommSec managing director Paul Rayson said.
Not surprisingly, millennials are also big users of the CommSec mobile app, making up to 50% of all mobile trades actioned.
"Technology has made it easier for us to support new investors with online tools such as CommSec Learn, a series of online tutorials that teach the basics of selecting and managing investments, and portfolio checks to better educate on share quality and diversification," Rayson said.
"It's important that their first thousand dollars of hard-earned cash is invested wisely so they can build their capability and confidence to invest for the long term to achieve their goals."