Investment

New investors are breaking the traditional mold when it comes to investing, CNBC survey finds – CNBC

Published

3 years ago

August 23, 2021

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There’s something different about the flood of new investors who entered the market in the last 18 months.

They are younger, more diverse, use technology to make trades and turn to social media to learn about investing and research investment ideas, a new CNBC/Momentive Invest in You survey found.

More than a quarter of investors polled started investing within the last 18 months, and 73% began in 2019 or earlier. Momentive surveyed 5,523 U.S. adults between Aug. 4 and Aug. 9, 2021; of those, 45% are investors.

The distinctions between the two groups are particularly clear when it comes to what they are investing in, how they make their trades and where they do their research.

New investors are more than twice likely to own cryptocurrencies compared to their more seasoned counterparts (26% vs. 12%) and are three times more likely to use a self-service mobile app as their primary way to buy and sell investments (63% vs. 20%).

Social media also plays a big role for new investors. More than a third said they used social media to research investment ideas, compared to 15% of those who began investing in 2019 or earlier. On the flipside, only 9% researched investment ideas through direct discussions with a broker or financial advisor, compared to 29% of the more seasoned investors.

It’s not surprising that new investors are getting excited about the market. The S&P 500 jumped more than 14% in the first half of 2021. New investors piled into trades like cryptocurrencies and meme stocks, such as GameStop, which ran up earlier this year, and AMC, which hit all-time highs in June.

“We are in the instant gratification era and often we allow that to drive a lot of our investment decisions, when we really need to look at investing in from long-term perspective,” said Matt Aaron, founder and CEO of Washington, D.C.-based Lux Wealth Planning, an affiliate of Northwestern Mutual.

In fact, since most new investors started after the stock market briefly collapsed in March 2020, they have only seen the market go higher, said Tyler Huck, a financial advisor for oXYGen Financial in Atlanta.

“It is fun to do when you are making money, but I don’t think a lot of these people have seen the other side of it yet,” he said.

Advice for getting started

If you want to start investing, first analyze your financial goals and look at your time horizon. For instance, if you are saving for retirement and it is more than 10 years away, you can feel comfortable taking on more risk in your portfolio.

Your portfolio should also be diversified

“You should have investments that behave differently and allow you to manage some of the risk associated with a concentrated segment of investments,” explained Aaron.

Diversification is more than just having a mixture of stocks and bonds, it’s also diversification within those asset classes. For example, within your stock allocation, you may have exposure to large cap, mid-cap, small-cap and international stocks. You should also revisit your investments and rebalance your portfolio if it becomes misaligned with your goals, Aaron said.

While you may want to invest in individual stocks, they are difficult to manage if it is not your day job, he said. However, mutual funds, index funds and exchange-traded funds provide you with a basket of companies and allow you to better manage risk, he said.

Meanwhile, if you are thinking about jumping into an alternative investment, like bitcoin, or want to buy the latest hot stock, make sure you put that into a separate bucket from your other investments or savings.

Then, treat those trades like you are going to Las Vegas, Huck advised.

“Have some money you want to gamble with and assume you are going to lose it all,” he said.

“It should not be a large portion of your nest egg or emergency reserves,” Huck added. “It should be your fun money that you are truly gambling with.”

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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