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Younger Investors’ Confidence, Risk Tolerance Rise: E-Trade

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What You Need to Know

  • Seventy-two percent of millennial and Gen Z investors said they are confident in their portfolio decisions,
  • Most younger investors said their risk tolerance had increased in the last three months.
  • It's critical that investors stay committed to a disciplined trading approach, E-Trade's Christopher Larkin says.

As the pandemic begins to loosen its grip on the U.S., 72% of millennial and Generation Z investors said they are confident in their portfolio decisions, 16 percentage points higher than a year ago and 15 points higher than the general population, according to E-Trade Financial’s quarterly tracking study of experienced investors, released Friday.

Seventy percent of younger investors said their risk tolerance had increased in the last three months of the pandemic. This was 19 points higher than in the third quarter — the first quarter E-Trade asked the question — and 23 points higher than the total population. 

Dynata conducted the survey in early April among an online U.S. sample of 957 self-directed active investors who manage at least $10,000 in an online brokerage account. Of these, 273 respondents were between the ages of 18 and 34.

Fifty-eight percent of investors under the age of 34 said they are trading equities and 55% are trading derivatives more frequently, compared with 40% and 36% of the total population. 

Seventy-six percent of Gen Z and millennial investors said they trade at least once a week on their smartphone, up 14 points from a year ago and 27 points higher than the total sample. 

Fifty-nine percent of younger investors, but only 39% of respondents overall, said they relied on their mobile device to trade during the last three months of the pandemic. 

“Over a year into the pandemic, trading activity remains robust, especially among young investors,” Christopher Larkin, managing director of trading and investment product at E-Trade Financial, said in a statement. 

“It’s critical for investors to stay committed to a disciplined trading approach during the dips and consider valuations and the fundamentals of any one name before swooping in on a new buying opportunity.” 

(Photo: Adobe Stock)