After first lockdown, more young people than ever are investing

After first lockdown, more young people than ever are investing

The first lockdown saw a spike in interest in the stock market from people under 30 and it hasn’t disappeared, according to a study by the Belgian financial market regulator FSMA on Monday.

Young people under 30 accounted for 9.9% in 2021 compared to just 4.5% in 2018. Meanwhile, the percentage of people investing in their 30s rose from 6.2% to 10.7%.

The rise in young people investing can be traced back to the first lockdown when the stock market spiralled downwards. Like other age groups, young people took advantage of the market and started buying when prices were low. In 2019, there were 5,500 new young investors. In 2020, there were 14,400 and in 2021, 12,800 more.

“Some people predicted that this craze would quickly subside, but they were wrong," Jean-Paul Servais, President of the FSMA, told Le Soir.

The FSMA researchers based their study on figures from the European Mifir database, which details all stock market transactions within the European Union. They honed in on transactions carried out between January 2018 and December 2021.

In it for the long run

Young people invest differently than their elders in that they keep their shares longer. Investors under 30 still have 50% of financial instruments bought in 2020, while the figure drops to 30% for people in their 30s and 40s.

The youngest group of investors are more global as they are more oriented to stocks outside of Europe compared to older investors. Those aged between 60 and 69 years old invest only 27.6% of their portfolio in non-EU stocks, while  49% of 18-29 year-olds go for it.

Unsurprisingly, young people invest smaller amounts than older people. Under-30s on average spend €1,923 per year, while 50-year-olds spend €7,550.

Gender investment gap

Yet even the youngest age group has something in common with older generations: it is overwhelmingly men who invest.

A lack of knowledge and less money to invest than men hold many women back from the stock market, according to Ben Laidler, a marketing strategist from global trading platform eToro in an interview with media site Berlingske. However, when women get going they are often better investors than men as they diversify their portfolios, do more research, and stay in the market longer, the strategist noted.

The FSMA study noted that the gender gap in investing is less pronounced in the youngest age bracket in Belgium.

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