The study collected data from Robinhood and examined investing preferences among millennials and Gen Z across the United States and United Kingdom for the 12 months ending April 2021. The technology and automotive industries dominated the market for young people, with companies like Microsoft (MSFT) and Tesla generating significant investment activity.
Interestingly, electric vehicle manufacturing company Nio (NIO) was the top security for millennial investors in 8 states, the most of any stock.
Nio was the most popular stock in Georgia, Montana, Oregon, Pennsylvania, Texas, Utah, Vermont and Virginia. The Chinese EV manufacturer has achieved high levels of success in the American stock market, despite not selling a single vehicle in the country.
Sustainability has been a key factor in determining which stocks to buy for young investors. Plug Power (PLUG), an alternative energy company, was the top stock for the younger generations in seven states.
In the U.S., the most popular stock overall for the combined millennial and Gen Z cohort was Apple, followed by Tesla and GE at number two and three, respectively. In the UK, Nio, Airbnb (ABNB), and Palantir (PLTR) were the younger generations’ most commonly traded stocks.
Airbnb was devastated by a pandemic which saw activity in the short-term rental industry drastically reduced in 2020. But as restrictions have been lifted and summer travel picks up, investors have identified ABNB as a stock primed for a bullish future.
Next-gen investing trends
Millennial and Gen Z investors are considerably more likely than older generations to finance investments through loans. A May 2021 MagnifyMoney survey found that 80% of Gen Z investors and 60% of Millennials surveyed admitted taking on loans to invest. Older generations were less likely to take out loans, with 8% of Gen Xers and 9% of Baby Boomers doing so.
The youngest adults have also shown great interest in socially-responsible investments. Through their buying habits, Gen Z have identified brand values as important in decisions to support a company. Environmental, social and corporate governance (ESG) data has emerged as a metric to promote sustainability and positive social impacts in business, and Millennials and Gen Z investors have prioritized some of these concerns in their investments.
Gen Z investors, which includes those born after 1996, have been particularly involved in pioneering a new type of financial investment within the fashion industry. Vintage clothing, accessories, and sneakers are often bought and resold several times on trading platforms like StockX and FlightClub. With reselling becoming a more mainstream way to make money for the younger generation, financial literacy has become a highly sought after commodity.
Enter social media
Investing education on social media has become wildly popular within the past few years. Among younger adults, especially Gen Z, TikTok has emerged as an increasingly popular go-to social media app for financial advice.
The quick format of the videos allows for complex information to be explained in a simple and engaging manner. Accounts like John E Finance and MoneyChannel have racked up millions of views making short, minute-long (or shorter) videos to educate users on basic financial topics such as write-offs, mortgages, tax preparation, and stock market investing.
Financial TikTok, or FinTok, has gained prominence in the past year as Gen Z and Millennial investments have increased during the pandemic. Nearly half of 18- to 34-year-olds have become more interested in investing over the past six months, with 20% of them attributing the interest to TikTok, according to The Guardian. In 2021, 20% of Millennials and Gen Z reported using Reddit for stock advice.
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.
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