Review of Literature: Newer Stock Traders
This is a review of literature on what the title suggests, a new generation of investors emerging. As a researcher, I've collected information from multiple sources regarding teenagers investing in stocks. This information includes, a rising number of young investor, the different types of stocks they are interested in, and the common mistakes they make. In the following paragraph, I will be giving a brief overview of the various statistics, data, perspectives, and studies I have researched.
I gather data and statistics from one of my articles, which shows what percentage of teenagers invest rather than sit on money. Another survey showed what types of stocks were these new investors attracted to. Below I have added some information from surveys about the stock market trend in terms of rising investors.
Also, these charts and statistics will help you better understand the data presented.
I gather data and statistics from one of my articles, which shows what percentage of teenagers invest rather than sit on money. Another survey showed what types of stocks were these new investors attracted to. Below I have added some information from surveys about the stock market trend in terms of rising investors.
- According to Stein Roe Mutual Funds, about 19% of students in grades 8 to 12 own stocks or bonds, up from 10% in 1993.
- About 2 million of them are active investors who pick their own stocks, estimates Ginger Thomson, chief executive of DoughNET.com, a financial Web site for teens.
- Nevertheless, a survey conducted by UBS, the Swiss bank that manages $158 billion of client money in the U.S. alone, found that people between 21 and 36, with two recessions fresh in their memories, are remarkably conservative financially.
- Seventy percent of people in that demographic in the UBS survey described their risk tolerance as moderate, conservative, or somewhat conservative.
- The survey also said that young people “now define risk as permanent portfolio losses.”
- Although numbers young investors are increasing, the percentage of young investors is decreasing in comparison to the 1990's generation.
- One out of two teenagers born after 2000 have chosen to save their money in terms of cash, rather than investing it in the market.
- As shown in the survey below, teenage investors are more likely to buy and hold investments for long term or have a mix of index and actively managed funds.
- Fewer young investors regularly manage their portfolios to maximize gains and to beat the market.
Also, these charts and statistics will help you better understand the data presented.
In addition to the the rising number of younger investors, there are difference in the types of stocks purchased. According to recent data by SigFig, stock portfolios of young people and older people tend to look very different. Younger investors are willing to take more risk and prefer to invest in more cutting-edge companies, while older investors are more likely to invest in stable blue chips. Some blue chip companies include, IBM, Exxon, Chevron, Procter & Gamble, 3M, and Johnson & Johnson. The new generation of stock traders are buying and selling stock in companies like Tesla, Amazon, Twitter, Facebook, Priceline, and Apple. These traders believe these stocks will appreciate because of the demand for their products and a familiarity with their company.
Finally, through my research, I discovered the common mistakes the amateur stock traders make. These inexperienced investors often fall in love with stock and are blindsided by key determinant of the stocks future. "Just because your stock is a personal favorite of yours, it does not mean they are a healthy company." Investing can be risky and being in denial can make it all the more challenging. Ignoring the Elders of Wall Street is another mistake stock traders of this age group ordinarily make. Companies like General Electric, Procter and Gamble, and American Express have had many decades of prosperity and continue to modernize to new and developing fields.
As you have seen, trading stocks is an emerging culture in our generation. With a rise in younger investors, we are seeing how this once 'old-person' hobby is becoming integrated among all age groups.
Finally, through my research, I discovered the common mistakes the amateur stock traders make. These inexperienced investors often fall in love with stock and are blindsided by key determinant of the stocks future. "Just because your stock is a personal favorite of yours, it does not mean they are a healthy company." Investing can be risky and being in denial can make it all the more challenging. Ignoring the Elders of Wall Street is another mistake stock traders of this age group ordinarily make. Companies like General Electric, Procter and Gamble, and American Express have had many decades of prosperity and continue to modernize to new and developing fields.
As you have seen, trading stocks is an emerging culture in our generation. With a rise in younger investors, we are seeing how this once 'old-person' hobby is becoming integrated among all age groups.