HOW MILLENNIALS ARE INVESTING - BUT DIFFERENTLY

How did you invest your first few Euros? In case you were born in the decades before the 80s or 90s, chances are you invested through a broker - and, of course, you paid broker fees.

Today's investing has completely changed. Investing is now digital. In this article, we’ll dive into how the millennials are playing the investment game today, and how this compares to the way the baby boomers were doing it.

HOW MILLENNIALS ARE INVESTING

The term ‘millennials’ is thrown around a lot, so let’s be sure we’re on the same page. A millennial commonly refers to an individual born between 1980 and the mid-1990’s with the turn of the millennium (Y2K) and the exponential rise of online capabilities defining their upbringing.

2008 was a very significant year in financial history. The historically stable U.S. housing market crashed, causing a chain reaction affecting the entire global economy. A vulnerability was then revealed; what was thought to be an unstoppable investment strategy had ended up failing. This made the generation skeptical of stockbrokers, banks, and traditional investment strategies, as they saw the consequence of putting too much liquidity and faith into stock markets.

However, as the wave of smartphones and startup culture caught fire in the years following the crisis, new doors opened. With everyone now holding mini-supercomputers in their pockets, information became accessible in a way previously unseen. News and information sharing is instantaneous and now at your fingertips, which is helpful when having to follow something as up-and-down as an investment.

PHOTO BY PAUL HANAOKA ON UNSPLASH

Investing; then and now

“Baby boomers”, are defined as individuals born in the 50’s and 60’s. The booming global market made traditional investments like properties and bonds popular among baby boomers. In case markets took a dip, company pensions and social security were the fallbacks, but what if those protections failed? Well, let’s remember the 2008 global financial crisis. This has now made millennials less trusting of middle men, (like banks) as they could be seen as too risky.

Millennials are digital natives and prefer to make decisions over smart devices. They rely on apps for real-time updates and recommendations. Today, there are more investment opportunities for millennials than ever before. A 2017 Morgan Stanley survey found that millennials are twice as likely as other investors to put their money into social or environmental investments. Millennials prefer to rely on Twitter, YouTube, Reddit, and other channels for analysing various opportunities. Being such a tech-savvy generation, millennials are also very comfortable making investments in modern day market commodities - like cryptocurrencies and tech startups (source).

How the industry is adapting

It’s 2020. Would you still trust a guy like Jordan Belfort (the Wolf of Wall Street), cold calling you and offering the hottest stock?

App developers well-versed in the financial sector understand that most investors want less intermediaries in their investments – cut out the sketchy middleman, as the kids say. Nowadays, the industry is looking to facilitate this power and give the opportunity to drive self-success with investments. Anything a broker could try and pitch now is information that could be deduced with a bit of research - thanks, Google! We’re sure there are several people kicking themselves because their stockbroker told them not to invest in this small company called Netflix due to Blockbuster passing on acquiring them.

The hurdles are not as high anymore, a smartphone and a bank account is all that’s needed for anyone to start investing. The rise of apps, such as eToro and Revolut, have made this a breeze. It’s now possible to start investing with as little as €10 using these programs, and this is exactly what we at STOKR are also aiming to accomplish. STOKR enables transparent investment through blockchain, taking the investment game to the next level, enabling communication between you, the venture owners, and other fellow investors. Check out our vision video to learn more.

To Wrap Up

Boomers were believers and millennials are cautious.

The 2008 financial crisis was bad, but it taught us not to be so blindly faithful to something that, under collapse, could cause such a spectacular nightmare. This has made the next generation of investors more cautious by diversifying their portfolios in finding things they deem worthy due to their own enabled choices.

Millennials are not afraid to invest - their desires and methods now come in different forms. Millennials seek transparency, transparency between an investment opportunity and the end user – nothing hidden, no surprises and no one in between. This is what we are trying to accomplish at STOKR, a platform that allows the user to navigate investments on their own, offering awesome support, education, and a great community.

Takeaways

• Millennials want to be educated to make good decisions and will be collaborative to do so.
• Investment platforms like STOKR empowers investors to make their own decisions, instead of relying on robo-advisors.
• The 2008 global financial crisis showed faults in our investment strategies and opened doors to more innovative ways to invest.
• Technology has made it easier than ever to invest, no longer will you need a stockbroker and deep pockets.
• Both baby boomers and millennials can learn from each other – boomers should be more cautious, and millennials should be more trusting (interesting split considering the history!).

Did learning about how millennials are investing inspire you? To invest in innovative companies or to raise investments through the STOKR marketplace, follow this link.

BY DIAMAAN GUEYE