Study: US Teens Not Keen to Invest on Wall Street
The GameStop meme frenzy created fortunes, but many teens are still unsure about the stock market.
By: Andrew Moran | September 8, 2021 | 489 Words
It has been a wild time in the stock market since the beginning of the coronavirus pandemic. From market meltdowns, to record highs, to meme frenzies, this may be a time that is hard to copy in the future. It has created an environment of both attraction and reluctance. For many teenagers in the United States, today’s financial markets are too off-putting. Could this lead to a lost generation, or will Generation Zers eventually come around and dip their toes in stocks?
Young People and Wall Street
A new study from Junior Achievement USA (a non-profit youth organization) and RSM (a tax and accounting firm) found more than one-third (37%) of teens would choose not to invest if they were given money to buy stocks on Wall Street. The survey also learned that 39% of teens view the stock market as a “make money quickly” scheme, 20% think it is “too risky,” and 40% believe stocks are a “good long-term investment.” Overall, the poll discovered that only half of teens think the stock market is “a good thing” for the average American.
But where are they getting their information? The study revealed that 43% of teens rely on social media, 35% turn to their parents, and 30% peruse websites.
Memes Killed the Stock Market Star?
The negative attitude toward the stock market stems from the GameStop saga that has captured traders’ attention in 2021. This was an incident where users of an online Reddit forum started buying GameStop shares in large numbers, pushing up the prices. This was done to damage a rich investment group that was planning to sell the shares at a low price. The events at the height of the memeified chaos pushed future investors away from stocks.
Leona Edwards, a financial planner and wealth advisor at Mariner Wealth Advisors in Nashville, said in a statement to CNBC:
“It’s understandable why they would be hesitant to put money into the stock market. But it could put a serious dent in how much they are able to save in the future. A lot of these teens are already thinking about different ways to invest other than the stock market. And diversifying is a really good thing.”
Among the teens who remain interested in investing, many would invest in stocks (43%), cryptocurrency (25%), and real estate (24%).
The poll highlighted that teens’ understanding of investing varied: most knew what “stock market” and “dividend” mean, but a lot of them did not understand other aspects, like the annual amount of money made through the stock market, or how many Americans have invested in the stock market through retirement funds.
Can Wall Street Attract Young People?
It was estimated that around 40% of young adults own stocks, but this figure could have increased during the coronavirus pandemic. When it comes to the future of Wall Street, online trading platforms and market innovation could appeal to Gen Zers and millennials.