Investment preferences of Gen Z investors
The financial landscape is constantly changing with the emergence of new investment options like blockchain, meme stocks, and cryptocurrency. Gen Z, the newest generation of investors, has taken notice and is exploring investment opportunities. A recent analysis conducted by Hugo Investing’s partner, Saxo Bank, used data from surveys by The Motley Fool, Bank of America, Drapers Annual Consumer Research report, and the Remake Fashion Accountability report to better understand Gen Z’s investment and spending habits
Stocks and Cryptocurrency
Stocks are the most common investment for Gen Z, with growth and value stocks being the preferred types. Although cryptocurrency has been volatile, 54% of Gen Z reported investing in it. Barriers to investing include the high cost of living, perceived risk, lack of funds, and a challenging economy.
Sustainability and Ethical Concerns
While Gen Z prides itself on being environmentally conscious, the analysis suggests that sustainability and ethical concerns aren’t high on their list of priorities when making investment decisions. Instead, they are more interested in brand names and the ability to resell. However, more than half of Gen Z investors said that ESG (Environmental, Social, and Governance) factors have become more of a consideration when buying clothing and accessories.
Sustainable Investing and ESG
Kaspar Huijsman, CEO of Hugo Investing and passionate investor, believes that Gen Z is missing out on the potential benefits of investing, stating that it’s essential to be aware of the long-term differences between stock returns and savings. When choosing to invest in sustainable options, evaluating the level of sustainability can be challenging, with traditional investments often pitted against sustainable alternatives.
Low-Risk Investments and Sectors
Gen Z investors prioritise long-term gains over short-term ones and opt for low-risk investments. The most popular sectors for investment are finance, real estate, and high-tech/emerging technology. Kaspar Huijsman suggests that taking a long-term approach is wise, even when investing small sums of money, as the power of compounding can result in significant returns over time.
Preparing for the Future
Overall, Gen Z is eager to make smart investment choices and prepare for their future. The data shows that while they may face challenges, they are ready to invest and think strategically about their finances.
The information in this article should not be interpreted as individual investment advice. Although Hugo compiles and maintains these pages from reliable sources, Hugo cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk. We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks.