A recent Bank of America survey revealed that 85% of young adults with extra income have adapted their investment strategies due to the economic challenges in the past year. How do millennials’ and Gen Z’s investment strategies differ?
Bank of America President of Preferred Banking Aron Levine notes a “get rich quick” approach by Gen Z opposed to long-term, retirement focused decisions made by millennials. The survey was carried out on young professionals who have between $50 thousand to $1 million in investable assets, who according to Levine have “good earning power.”
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Video Transcript
JULIE HYMAN: And, Aaron, what are some of the biggest investment philosophy decisions or differences, I should say, between Gen Z and millennials?
AARON LEVINE: Yeah. You know, I guess, not surprising we think again Gen Z, 18 to 26, there’s a lot of let’s get rich quick stuff. So probably a little more individual stock-buying, a little more risk-taking, a little more I’m trying to do something fast. Whereas the millennials are thinking more long term, which is terrific. Probably, 10 years ago, they might have had a different philosophy. But right now, they’re thinking retirement, they’re thinking long term investing. And so that’s kind of an age thing. And I wouldn’t be surprised if that Gen Z cohort 5, 10 years from now starts doing the same thing.
JULIE HYMAN: I mean, how much of that, though, is sort of TikTok-driven or social media-driven for Gen Z that there is that philosophy out there that you can get wealthy quickly in the market?
AARON LEVINE: It’s certainly there. You know, actually, one of the things I was surprised about with this survey was over 50%, it was 52%, said that they don’t believe social media is a good place to get financial advice. And that was pretty encouraging. And I bet you that would have been a higher number– a lower number a few years ago. So I do think that while social media, TikTok, has big influence there’s no question other sources, more reliable sources are becoming more and more used certainly by the millennials. And hopefully, Gen Z will do the same.
JOSH LIPTON: And, Aaron, in terms of this are the demographics of the people you’re surveying, any more color there? You know, how much are they earning for example?
AARON LEVINE: Yeah. So sure. For the millennials, so it’s really folks that have about $50,000 to $1 million in investable assets– sorry, $100,000 to $1 million. And then Gen Z, we went $50,000 to $1 million. So these are all certainly young professionals who have good earnings power and investable assets that we’re talking about, which is, again, these are the folks that are in the market, they’re active.
But they are clearly– and, you know, what you’re seeing is with the labor market pretty strong, and these are all individuals that have good solid paying jobs, and they’ve saved some money, and they’re now actively investing.
JULIE HYMAN: Aaron Levine, thanks so much for bringing us the results of the survey. Appreciate it.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
