Gen Y and Z lead the charge on buying stocks, despite less diversifying

A young investor views charts on his computer screen and tablet in low-lit room

New data from Openmarkets’ XYZ of Australian equities report reveals that despite the pressures brought forth by inflation and the cost of living crisis, younger investors are bucking the trend towards selling their equities, unlike their older counterparts. 

Generation Y and Z are increasingly buying and holding equities to invest for the long term, while reducing their share trading frequency below that of the Baby Boomers cohort in 2023. 

In fact, Openmarkets’ analysis of 300,000 share trading accounts shows that 64% of Gen Y and Z’s trades in the first quarter of 2023 were buys, compared to a slightly lower 61% for Gen X, and 54% for the Baby Boomers. 

Younger investors look towards the future of resources

The data also shows that Gen Y and Z are largely focused on future-forward investments with the potential for growth – primarily in the form of exchange-traded funds (ETFs) and lithium stocks. 

In the first quarter of 2023, interest in ETFs from the younger generations grew from 27% to 29% of total trades. 

According to Openmarkets, Gen Y and Z’s most bought stock in Q1 2023 was in Australian  lithium mining company, Pilbara Minerals, followed by Stanmore Resources (coal mining) and Core Lithium Ltd. 

Lithium, often used in rechargeable batteries for a range of products like phones and electric vehicles, has good long-term growth prospects, according to Forbes Advisor

Long-term investments are what the younger generations are looking for right now

Gen Y and Z are trading less frequently than Gen X and the Baby Boomers, with the youngins conducting an annual average of 10.7 trades, Gen X at 16.3, and the Boomers shaking their portfolios up with 27.3 trades a year.  

Openmarkets chief executive, Dan Jowett says the data challenges the prevailing stereotypes of younger investors, who often follow the ‘hype’ and prefer higher risk investment strategies. 

“In an era where young people are often associated with 'hype' stocks, finfluencers and short-term wins, it is interesting to see this is not necessarily reality,” he said.

“Our data shows younger Australians are trading less, sticking to stocks they know and gradually accumulating them to build long-term wealth.” 

Diversification declines across the ages 

However, Openmarkets also noted that, on the whole, portfolio diversification is dropping – and it’s not a problem isolated to one generation, according to Jowett. 

“What also stands out for all generations, is that portfolios are becoming marginally less diverse, adding risk as market volatility continues. All investors should understand the impact of risk and volatility on portfolios as they consider short and long-term goals.”

So, with investors looking to buy and hold for the long term and reduce market volatility by embracing portfolio diversification, having a good share trading platform is crucial. That usually means low brokerage and account fees, reliable data, and access to a range of markets and equities, which can be an important step to reaching your investment goals. 

At Mozo, we compare online share trading accounts and give you the low-down on the costs and features on some of the best share trading platforms in Australia

Take a look at some of the featured platforms below to get started.

Share account comparisons on Mozo - rates updated daily

Search promoted share trading below. Advertiser disclosure.
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    Share Trading

    Small trade brokerage
    Monthly fee
    $3.00
    $0.00

    Invest in AU stocks, US stocks, HK stocks and ETFs on moomoo trading platform. Enjoy $0 brokerage fees for AU&US stock for 180 days as a new user. With US trades from $1.99 USD, other fees apply. Backed by a Nasdaq-listed fintech. (T&Cs apply).

    Details
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    Mozo Experts Choice 2023
    Tiger Account

    Small trade brokerage
    Monthly fee
    $5.50
    $0.00

    Tiger Brokers is an online broker listed on NASDAQ. It offers access to US, ASX & HK stocks, ETFs and US options trading. Enjoy one brokerage-free trade per month on US and ASX stocks* with account opening. Mozo special offer for new users only: Get USD $25 in Tesla fractional shares plus USD $50 in fractional shares for new accounts with an accumulative net deposit of AUD 500*. T&Cs apply.

    Details
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    Share Trading

    Small trade brokerage
    Monthly fee
    $7.70
    $0.00

    Buy and sell with a low $7.70 flat fee per trade and access to all ASX Shares and ETFs to invest in with GO Markets. Enjoy dedicated local customer support, a regulated Australian company for trading ASX Shares and ETFs. Plus, enjoy $0 Brokerage on your next 15 trades! (T&Cs apply).

    Details
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    Idle Cash

    Small trade brokerage
    Monthly fee
    $5.50
    $0.00

    Receive interest on your uninvested cash. Deposit over USD/AUD 5,000 to start receiving 1.5% return; 2.25% return on over AUD 50,000; Up to 3.25% return on over USD 50,000. Mozo special offer for new users only: Get USD 50 fractional shares plus USD 25 Tesla shares with a cumulative net deposit of min. AUD 500 within 7 days of the first account opening. T&Cs apply.

    Details
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    Webull Share Trading Platform

    Small trade brokerage
    Monthly fee
    $4.90
    $0.00

    Webull lets you connect with international markets, trading ASX and US stocks and options. You’ll gain access to user-friendly platforms and technology-driven educational resources plus 2% yield on idle cash with Webull cash management. Earn up to 5.3% (P.A) yield on uninvested funds with Moneybull plus a cash voucher worth USD100 by funding USD2000 or more and maintaining the funds for 90 days! (T&Cs apply)

    Details
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    ASX Shares

    Small trade brokerage
    Monthly fee
    $0.00
    $0.00

    Join the world’s leading social trading platform, trusted by 30 million users worldwide. Invest in stocks, crypto, ETFs and more - all in one place. Hone your financial skills with a $100K virtual demo account.

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