A big driver of the roaring bull market of the 1980s and 1990s was the impact of the Baby Boomer generation. This massive group was in the prime earning years and they poured huge amounts of their savings into stocks, bonds and mutual funds.
So could we see something similar with the Millennial generation? Perhaps. According to Pew Research, about 35% of the U.S. work force — or 56 million people — are made up of this group.
But when it comes to investing, things may be much different than what we saw with the Baby Boomers. After all, there are more investment options and technologies available. Hey, a smartphone is really all a person needs. And yes, Millennials generally have different attitudes about society.
But given that this group is large and diverse, it can still be tough to get a sense of the trends — such as what are really so-called Millennial stocks. If anything, Millennials may not even be interested in traditional vehicles at all.
This is one of the key conclusions of a poll from Swell Investing (it included 2,033 respondents). The question posed was: “If someone gave you $5,000 today to invest in one type of investment, which of the following would you put the money into?”
Well, 12% of Millennials said they would go all-in on cryptocurrencies. This was the same percentage that would put their money into a retirement account.
There are certainly many reasons for this interest in alternative investments. First of all, Millennials have heard stories or have friends who have scored big gains from bitcoin. What’s more, this generation has grown up with technology. So why not focus on new-fangled digital investments? And besides, with the memories of the Great Recession still fresh, there is probably some level of distrust in the traditional financial system as well.
Types of Millennial Stocks
When it comes to Millennial stocks, a big area of interest is in socially responsible investing. Millennials generally want to focus on those companies that are progressive, such as by developing clean fuels or promoting diversity in the workplace.
A recent survey from Nuveen highlights this (it included over 1,000 affluent investors). About 92% of Millennials agreed with the following: “I care more about having a positive impact on society than doing well financially.”
No doubt, this is much different from the attitudes of the Baby Boomer Generation, which was also known as the Me Generation.
In light this, it should be no surprise that Wall Street is taking action. Consider that Morningstar tracks 234 mutual funds and exchange-traded funds (ETFS) that are focused on socially responsible investing.
Well-Known Brands and Millennial Stocks
A way to gain insight on Millennial stocks is to look at the trading data of investment mobile apps. And one of leaders is Robinhood. The median age of the customer base is around 28 years old.
The company tracks its most popular stocks — and they include ones that definitely fit within the cultural vibe of Millennials. They include operators like Apple Inc. (NASDAQ:AAPL), Facebook, Inc. (NASDAQ:FB), Tesla Inc (NASDAQ:TSLA) and Netflix, Inc. (NASDAQ:NFLX).
In other words, it seems Millennials understand the importance of diversification — which is something that should never go out-of-style, regardless of the generation.
Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.