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Gen Z and millennials look to social media for investment advice

By Jon Bragg

January 12 2022
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Gen Z and millennials look to social media for investment advice

By Jon Bragg
January 12 2022

Younger investors are much more likely to use social media for investment decisions.

Gen Z and millennials look to social media for investment advice

By Jon Bragg

January 12 2022
Share

Younger investors are much more likely to use social media for investment decisions.

Gen Z and millennials look to social media for investment advice

More than half of Gen Z and millennial investors said they had taken an investment action based on social media in a new survey from US-based firm M1 Finance.

Short-term investors and individuals concerned about meeting basic living expenses in a state of so-called “financial survival” were also more likely to use social media for guidance.

“It is almost impossible to scroll through social media or watch the news without hearing about someone hitting the jackpot through the latest meme stock or cryptocurrency,” said M1 Finance founder and chief executive Brian Barnes.

“It might seem at times like we have entered a new era of instant gratification when it comes to money management. But we’ve found that people are still prioritizing investing with a long-term focus.”

Alternative investments, including cryptocurrency, were favoured by both younger investors and those in a state of financial survival.

Over 60 per cent of Gen Z and millennial investors said they had made an investment in cryptocurrency in the past year, while 73 per cent of investors in financial survival planned to invest in an alternative asset in the next 12 months.

In comparison, 54 per cent of investors who had reached a state of “financial freedom” with enough savings, investments and cash to live their life as desired planned to make an investment in alternative assets.

This group was found to be more likely to use long-term investment strategies than those in a state of financial survival. Long-term investors were more than twice as likely to report being financially free than short-term investors.

Growth investing (45 per cent), diversification (44 per cent), buy and hold (40 per cent), and dividend investing (37 per cent) were the most popular strategies for the financially free.

About half as many individuals in financial survival adopted diversification and buy and hold strategies in their portfolios. However, these investors were optimistic about reaching financial freedom within their lifetime.

Forty-five per cent strongly agreed that they were on their way to financial freedom compared to 27 per cent of total respondents.

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