Many studies explore the generational differences between baby boomers and millennials, but what investments do millennials actually buy today? Apex Clearing analyzed the stock buying habits of thousands of millennial clients. With the transference of wealth between generations on its way, advisors would be smart to understand this new breed of investor. Here are key findings:
1. Millennial investors are mostly interested in brands that they use, as well as those that align with their values.
A look at the top 25 holdings by millennial investors showed their top five stocks and percentage of millennials holding them: Amazon (10.6%), Facebook (5.8%), Apple (5.8%), Netflix (4.1%) and Tesla (3.5%).
On the other end of the top 25: General Electric (0.6%), Bank of America (0.5%), Ford (0.5%), Salesforce (0.5%) and Activision Blizzard (0.5%).
Also included in the top 25 were Chinese companies IQIYI, JD.com and Alibaba.
2. Millennials invest mainly in sectors that are technology-driven and largely disruptive.
Apex found the top sectors for millennial investing were: retail (Amazon), personal computing (Apple), content delivery (Netflix), auto (Tesla), computer hardware (Nvidia), e-commerce (Alibaba), and payments (Square).
3. Millennials are contrarian in their purchase of stocks, and follow “buy and hold” strategies despite their “instant gratification” reputation.