Young investors undeterred by volatility: DataBY CHLOE WALKER | THURSDAY, 23 JUN 2022 12:25PM
Read more: Pearler, Ana Kresina, Nick Nicolaides
Despite an ever-increasing market of volatility and ongoing macroeconomic instability, young investors are buying shares 10 times more often than selling this year, according to insights from investment platform Pearler.
In fact, buy orders on Pearler for investors in their late 20s to early 40s have outpaced sell orders 8 to 1, as younger investors continue to build wealth.
"The heightened market volatility this year has presented many challenges for younger investors who are looking to grow and accumulate wealth rather than protect it," Pearler co-founder Nick Nicolaides said.
"However, despite these setbacks, what we see is that investors on our platform have continued to trade, buying at a rate of 89% versus 11% sells."
Month to month, Nicolaides said it's been interesting to see how continued negative news has played a role.
"In February and March, we saw investors largely brush off the macro fears, with inflows at 91% of all transactions. April saw some slight attrition at 88% but that has rebounded back to 90%," he said.
While older investors look to protect their wealth as they approach retirement, younger investors who are starting their investment journey or who are still early in the accumulation phase are obviously concerned that the opportunities for wealth accumulation are drying up compared to previous generations.
"Today younger investors have access to financial information and news across various sources," Nicolaides said.
"This knowledge and the current economic climate are a catalyst encouraging investors to take a more active approach to managing wealth and build diversified portfolios."
In addition, Pearler research indicates that Millennial women are picking up share investing at the same rate as men, despite having to overcome a 36% wage gap.
"Our recent research shows that both women and men hold an average 2.5 assets, invest once a month, and allocate about 70% of their portfolio to ETFs," Nicolaides said.
Pearler head of product Ana Kresina added: "We've seen financial independence blow up as a theme for young people, particularly women, who are becoming more proactive in dealing with historical hurdles like lower wages, minimum cheque sizes, access to education and support."
Kresina said that alongside allocating a higher portion of their already reduced income to investing, what is also interesting is the product choice difference between men and women.
"What stands out, also, is that women are investing in ESG ETFs at a rate greater than double that of their male counterparts," Kresina said.
"What we are hearing and then seeing in the data is that younger investors, especially women, want to make more ethical investment choices when considering their future - it's something investors feel very strongly about."
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