Crash crypto, or the first fear of young investors. The analysis by Simone Di Biase, Head of Relationship Management BG SAXO
ùDespite the concerns, 56% of respondents plan to invest in this sector anyway. Overall, 59% of young investors expect to increase their equity investments despite recent and potential future market corrections. Tech, work-from-home (WFH), energy and Meme stocks are expected to perform best while social media remains a source of information for new investors, with Reddit, Twitter and Facebook among the most popular. 2022: WHAT YOUNG INVESTORS EXPECT New research we conducted with Saxo Bank confirms that retail investor participation in financial markets will continue to grow in 2022, although there is some concern over potential future risks with the markets which, after those that have already occurred, may face new corrections. The biggest bugbear for young investors aged 18 to 34 is a cryptocurrency crash. However, despite these fears, more than half (56%) plan to increase their investment allocation to the digital asset class. An even higher percentage (59%) would increase investment in cryptocurrencies if the asset class were regulated. THE ROLE OF INFLATION AND THE ROLE OF TECH SECURITIES Inflation coupled with a larger stock market bubble leading to a sharp price correction were the second and third positions, respectively, in terms of greatest concern for young investors. Just over one in ten (13%) was worried about the impact of pandemic risk on their investments. Despite recent equity market performance, three in five young investors (59%) still plan to increase their equity investment allocation this year. Almost half (46%) believe that technology stocks will perform best despite the most well-known companies, since the beginning of the year due to high volatility and beyond, have recorded losses on the stock market: such as Netflix which sells 33 %, Amazon 16%, Microsoft 12% and Alphabet 10% 2. WFH stocks, energy stocks and Meme stocks were listed in second, third and fourth place respectively in terms of investment performance expectations. Of the young adults surveyed, most are attracted to investing to earn extra income, followed by the security of their long-term financial future. Only one in seven (14%) cited having fun as a reason to invest, effectively reducing the fears of a wide spread of gambling addiction in trading. Young investors continue to use social media as their main source of information, followed by news sites and forums. Only one in ten say they are influenced by their "social group". When asked more specifically, Reddit, Twitter and Facebook were seen as the most important media platforms for investing in 2022. Just over one in ten (12%) suggested it was Instagram, despite the growing use of influencers to attract the interests of new investors. The list of WFH stocks among the most traded in the last two years THE OUTLOOK FOR THE NEXT MONTHS Commenting on these data, it can be said that, one year after the events that saw the rise of the so-called army of Reddit traders, a more stable group of young investors is emerging who will shape the future of trading in the years to come. Many of them, however, have not witnessed a market crash or a severe financial crisis for age reasons. For this reason it is essential that, in order to continue to invest wisely, they are able to identify reliable sources of information and, at the same time, also try to diversify their investments to protect their capital, and perhaps even earnings.made in recent months. In this perspective, platforms such as those offered by BG SAXO continue to invest, not only in terms of improving the user experience, but also to encourage investors to better analyze the different scenarios that will influence their choices. The mantra that markets always rise may no longer be true in 2022 or longer, and as a result, diversification and risk management remain key.