New investors grow stimulus money in markets

After years of sitting on the sideline, younger investors have stowed stimulus money in the markets, investing in products and services they love and using new financial services.

Many people received stimulus money over the past year-plus. According to a CNBC poll, half of the investors aged 18 to 34 invested stimulus money in stocks, mutual funds, and other assets.

Likewise, Charles Schwab found that 15 percent of all retail investors first jumped into markets in 2020, with a median age of 35. Dubbed “Generation Investors,” many focused on long-term growth rather than short-term profits.

Writing for Forbes, Stephen McBride argues that younger investors want “to own companies changing the world. It all but guarantees disruptors will continue to rip higher over the next few years.”

As for specific stocks, APEX Clearing reports that Apple, Amazon, Tesla, Microsoft, and Facebook are the most popular stocks among millennials.

Cryptocurrency is also finding its way into investment portfolios. The CNBC survey found that 11 percent of investors actively invest in cryptocurrencies. While crypto has a reputation for quick gains and wild swings, 60 percent are investing due to long-term growth prospects. Thirty-six percent of new investors believe Bitcoin will gain value, compared to just 20 percent of other investors.

Despite increased participation, younger folks still lag behind older investors. Gallup found that 39 percent of people aged between 18 and 29 owned stocks in 2021, compared to 62 percent of those aged 50 to 64.

Still, younger investors are already impacting financial services. A Motley Fool survey found that 37 percent of millennial and gen Z investors use Robinhood, which offers commission-free trading.

In response, Ameritrade, Charles Swab, and other traditional brokers have rolled out zero commission trading.

Free and low-fee investing options may encourage stock ownership and help investors keep more of their money in their portfolios.