Generation Z — adults between 18 and 25 years old — are more financially sophisticated than any previous generation was at their age,according to an Investopedia Survey.
This social media generation uses YouTube and TikTok for financial advice, and, nowadays, opening a brokerage account is pretty easy.
Kyle Pilgrim started investing in the stock market when he was 18. He opened a brokerage account with Robinhood during his freshman year at Florida Atlantic University in Boca Raton.
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“I’m like, 'hey, it seems easy enough.' They say you just gotta give them some information and you can start investing as little as a dollar,” Pilgrim said.
He bought some tech stocks. Then, he took advice from the online forum, Reddit.
“I did jump on the train of trading Reddit stocks, and I did get burned pretty badly by it,” Pilgrim said.
But Pilgrim quickly learned from his mistakes. Now, he’s 23, and said market fluctuations since the beginning of the pandemic prompted him to understand why stocks go up and down.
“Once I started to understand it, I felt more comfortable leaving my money in there even as it dipped and then went back up," Pilgrim said. The more I understood it, the more I researched it, the more I thought, 'I’ll just ride the wave',”
Greg McBride, the Chief Financial Analyst at Bankrate, a personal finance website, said this mindset is common amongst members of Gen Z.
“In the span of a year, a year and a half, a lot of younger investors really got that view of, if you just hang on it does come back … and that’s not a perspective that had been so evident in the decade preceding that,” McBride said.
According to a study from Bankrate, 34 percent of Gen Z is invested in the stock market. McBride said current market volatility isn’t keeping young investors away.
“It’s Gen Z more so than other generations that say they are most likely to increase the amount they’re investing in the stock market this year relative to a year ago,” he said.
Kyle Pilgrim finds the information he sees on social media useful, but likes to do his own research. He doesn’t buy individual stocks anymore – he prefers index and mutual funds, and has a Roth IRA. He’s in the market for the long haul.
“In the beginning I definitely wasn’t, I was probably in it to see if I could make a quick buck off of something, to be honest. Nowadays, you know, it’s all long term. I’m planning for retirement,” he said.
