The face of the people investing in the stock market has changed. According to CNBC, your average investor is now younger, more diverse, and very tech-savvy, often choosing to deploy the use of social media and their own research to get ahead of competitors. The stereotype of traders being well-heeled and well-educated professionals in the offices of Wall St are long-gone – though obviously, institutions still have a big role to play. How is this new generation of stock traders getting ahead? And what’s the future for them in the red-hot US stock environment?Technology focused
The youngest generation are increasingly digital native, meaning they’ve been interacting with digital tech in such a way that they are fluent in its use from a young age. This is an advantage in the modern market. Al Jazeera highlights how tech-savvy, social-media using investors bucked trends in early 2021, taking on the big names of stock market investment. Using their social media tools and then combining this with modern stock trackers and platforms creates a fantastic advantage for new traders when it comes to getting ahead of the curve and looking for new trends in stocks. What’s more, the lifestyles and consumer choices of many of these traders enables them to have a clearer perspective on what modern consumers want.
Modern consumer trends have been marked by the emergence of what McKinsey termed the ‘True Gen’. This refers to the socially progressive, upwards mobile and highly ethical consumerism of Generation Z. Companies can no longer afford to simply advertise their values; they must be demonstrated, every day, in products, and backed up with independent evidence. This has had a huge impact on the stock market. ETFs in the green sector have seen tremendous growth; Invesco Solar ETF (TAN) has a 5-year ROI of 315.85%; the MCSI Sustainable Future (ERTH) 141.57%. The consumer trends of the younger generations are creating real growth for related stocks and funds; this also puts them in a prime position to exploit where the market is moving. They have the knowledge, and they’re using it.
Stock trading has become more and more of a rapid process ever since the movement of businesses towards the stock exchange in the hopes of shaving off milliseconds on trades. Today, mobile investment is the weapon of choice for the younger generations. Using high-speed and low-fee trading apps, they can complete trades faster and with more flexibility than classic platforms. This enables them to keep more of their overheads and also helps to tie in with that key trading strategy of using their day-to-day knowledge of consumer trends and trades to make profits.
All of this should be music to the ears of your average small-time investor. The market is wide open, and will benefit those who are capable of taking advantage through their own hard work and research. That’s exciting for the market, for new investors, and will present an interesting new future.