Gen Z is the generation that is investing in the stock market the most. Why? “FOMO,” or the fear of missing out, affects them.
The majority of Gen Zers are jumping headfirst to a stock market that has experienced significant ups and downs over the previous year. More than any earlier generation, nine out of ten (90%) claim to be actively trading and reacting to economic issues like inflation and rising interest rates.
FOMO may suggest that Gen Z is naively joining the investing bandwagon, as they did during the meme stock mania of the epidemic era, but that may not be the case in this instance. Investing worries are becoming more common, and Gen Z is using their variety of financial options to learn as they go.
According to the Bankrate survey, which polled about 3,700 U.S. people in 2023, nearly 90% of Gen Z investors indicated they made purchases, sales, or deferred additional investments in reaction to inflation and rising interest rates.
In contrast, just 68% of millennials, 38% of Gen Xers, and 35% of investors in the baby boomer generation had the same response. In addition, Gen Z is the generation that purchases the most.
When compared to 43% of millennials, 19% of Gen Xers, and 9% of boomers, more than half of Gen Z investors said they anticipate investing more in stock-related investments this year than they did last year.
FOMO isn’t just a problem for Americans, either.
According to a recent CFA Institute survey, 60% of young investors in China and 43% of those in the U.K. identified FOMO as a reason for their investments, compared to 41% of Gen Zers in the U.S. and Canada who did the same. The same feelings were stated.
It’s not surprising that young individuals are savvy with their finances. This generation has experienced the rise and fall of the meme-stock frenzy, the deflating of the crypto and NFT bubbles, and numerous bank failures since the pandemic.
Due to the ease with which trading is now possible thanks to apps like Robinhood and Gen Z’s general skepticism of the economy and institutions, they are likely to have a different attitude on money than previous generations.
With more than half of them investing in the market and a quarter in individual equities, Gen Z is already the most financially active generation at their age.