E*TRADE Study Reveals Significant Confidence Boost Among Millennial and Gen Z Investors
June 04 2021 - 8:05AM
Business Wire
Risk tolerance among young investors also
increased, hitting a record high
E*TRADE Financial Holdings, LLC today announced results from the
most recent wave of StreetWise, the E*TRADE quarterly tracking
study of experienced investors. Results show confidence spiked,
risk tolerance grew, and engagement increased among Gen Z and
Millennial investors during the pandemic:
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the full release here:
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(Graphic: Business Wire)
- Over a year into the pandemic, confidence has been
building. Nearly three out of four investors (72%) under the
age of 34 said they are confident in their portfolio decisions, 16
percentage points higher than last year and 15 percentage points
higher than the total population.
- Risk tolerance reaches a pandemic high. More than two in
three Gen Z and Millennial investors (70%) said their risk
tolerance increased within the last three months of the pandemic,
19 percentage points higher than Q3 2020—the first quarter the
question was asked—and 23 percentage points higher than the total
population.
- And they say they’re trading more often. Over half of
investors under the age of 34 said they are trading equities (58%)
and derivatives (55%) more frequently, compared to 40% and 36% of
the total population, respectively.
- Mobile trading activity also saw a jump. More than three
quarters of Gen Z and Millennial investors (76%) said they trade at
least once a week on their smart phone, up 14 percentage points
from a year ago and 27 percentage points higher than the total.
Nearly three in five (59%) said they are more likely to rely on
their mobile device to trade during the last three months of the
pandemic, compared to 39% of the total.
“Over a year into the pandemic, trading activity remains robust,
especially among young investors,” said Chris Larkin, Managing
Director of Trading and Investment Product at E*TRADE Financial.
“While the market has continued to rise during most of the
pandemic, keep in mind that volatility is par for the course. It’s
critical for investors to stay committed to a disciplined trading
approach during the dips and consider valuations and the
fundamentals of any one name before swooping in on a new buying
opportunity.”
Mr. Larkin offered additional guidance to young investors
getting started with trading:
- Do your homework before committing. It’s easy to get
caught up in the latest stock fad, so dig into fundamental and
technical indicators of a stock before diving in. Investors may use
fundamental analysis to narrow down the choice of stocks and
compare companies side by side, while technical analysis may come
into play as they enter and exit positions and manage risk.
- Education is key. With barriers to trading lower than
ever and an abundance of information to be found, emerging
investors can easily arm themselves with investing and trading
insights. Keep up-to-date with webinars, videos, and articles on
trading strategies and macro investing trends.
- Test drive trading ideas. Many firms offer paper trading
that allows traders across experience levels to test-drive any
investing idea—from simple equity trades to complex options
strategies—without committing actual capital. Monitor a paper
trading portfolio and easily modify positions to analyze new
scenarios after executing a trade.
About the Survey
This wave of the survey was conducted from April 1 to April 12
of 2021 among an online US sample of 957 self-directed active
investors who manage at least $10,000 in an online brokerage
account. The survey has a margin of error of ±3.20 percent at the
95 percent confidence level. It was fielded and administered by
Dynata. The panel is broken into thirds of active (trade more than
once a week), swing (trade less than once a week but more than once
a month), and passive (trade less than once a month). The panel is
60% male and 40% female, with an even distribution across online
brokerages, geographic regions, and age bands. The <34 data set
is comprised of 273 investors between the ages of 18 and 34.
About E*TRADE Financial Holdings, LLC and Important
Notices
E*TRADE Financial Holdings, LLC and its subsidiaries provide
financial services including brokerage and banking products and
services to retail customers. Securities products and services are
offered by E*TRADE Securities LLC (Member SIPC). Commodity futures
and options on futures products and services are offered by E*TRADE
Futures LLC (Member NFA). Managed Account Solutions are offered
through E*TRADE Capital Management, LLC, a Registered Investment
Adviser. Bank products and services are offered by E*TRADE Bank,
and RIA custody solutions are offered by E*TRADE Savings Bank, both
of which are national federal savings banks (Members FDIC). More
information is available at www.etrade.com.
The information provided herein is for general informational
purposes only and should not be considered investment advice. Past
performance does not guarantee future results.
E*TRADE Financial, E*TRADE, and the E*TRADE logo are registered
trademarks of E*TRADE Financial Holdings, LLC. ETFC-G
© 2021 E*TRADE Financial Holdings, LLC, a business of Morgan
Stanley. All rights reserved.
Referenced Data
How confident are you that you are
making the right decisions for your portfolio?
TOTAL
AGE <34
Q2’21
Q2’20
Q3’20
Q4’20
Q1’21
Q2’21
Top 2 Box
57%
56%
59%
70%
66%
72%
Extremely confident
21%
27%
24%
30%
25%
30%
Very confident
36%
29%
35%
40%
41%
42%
Somewhat confident
36%
33%
35%
24%
26%
25%
Only a little confident
6%
10%
5%
4%
7%
2%
Not confident at all
1%
1%
1%
2%
1%
1%
Bottom 2 Box
7%
11%
6%
6%
8%
3%
My risk tolerance has __________ within
the last three months of the pandemic.
TOTAL
AGE <34
Q2’21
Q3’20
Q4’20
Q1’21
Q2’21
Top 2 Box
47%
51%
65%
65%
70%
Greatly increased
17%
20%
23%
20%
27%
Somewhat increased
30%
31%
42%
45%
43%
Stayed the same
41%
31%
25%
26%
23%
Somewhat decreased
9%
14%
9%
8%
5%
Greatly decreased
3%
4%
1%
1%
2%
Bottom 2 Box
12%
18%
10%
9%
7%
Within the last three months of the
pandemic, would you say you are trading equities...
TOTAL
AGE <34
Q2’21
Q2’21
Top 2 Box
40%
58%
Much more frequently
16%
26%
Somewhat more frequently
24%
32%
About the same
49%
34%
Somewhat less frequently
7%
8%
Much less frequently
4%
--
Bottom 2 Box
11%
8%
Within the last three months of the
pandemic, would you say you are trading derivatives...
TOTAL
AGE <34
Q2’21
Q2’21
Top 2 Box
36%
55%
Much more frequently
15%
23%
Somewhat more frequently
21%
32%
About the same
49%
34%
Somewhat less frequently
8%
10%
Much less frequently
7%
1%
Bottom 2 Box
15%
8%
Approximately how often do you use an
investing and trading app on your smart phone?
TOTAL
AGE <34
Q2’20
Q2’21
Q2’20
Q2’21
At least once a week (Top 3
Box)
40%
49%
62%
76%
At least once per day
11%
13%
17%
20%
2-3 times each week
12%
19%
21%
28%
About once per week
17%
17%
24%
28%
2-3 times each month
11%
10%
18%
12%
About once per month
6%
5%
6%
6%
Less than once per month
9%
7%
3%
2%
I do not have/use an investing/trading
app
34%
29%
11%
4%
Within the last three months of the
pandemic, when it comes to managing your accounts, have you found
yourself...
TOTAL
AGE <34
Q2’21
Q2’21
More likely to rely on a mobile app to
trade
39%
59%
More likely to use a sophisticated
software like a dedicated trading platform
38%
57%
More likely to seek out financial advice
from an investment professional
40%
50%
More likely to use an automated investment
solution like a robo advisor
13%
16%
None
33%
8%
Other
2%
1%
Gen Z and Millennials (young investors) are
defined as age 18–34 years.
ETFC
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version on businesswire.com: https://www.businesswire.com/news/home/20210604005083/en/
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