Gen I Voices:

 A candid conversation with a new investor 

Article

October 6, 2021

By Marianne Ahlmann, Senior Manager, Communications 

Over the past 18 months, we have seen a surge of new investors coming into the market. Schwab calls this new cohort “Generation Investor” (Gen I) and estimates it makes up 15% of U.S. stock market investors today.  

New research by Schwab reveals how Gen I is unique compared to those who started investing prior to 2020 (let’s call them “seasoned investors”). 

It probably won’t surprise you that Gen I is a rapid adopter of technology and their expectation for innovation is high. When it comes to their finances, 45% anticipate adopting technology to manage money at a faster rate than pre-pandemic. 

They also have unique goals and investing preferences—they’re less likely to invest with retirement in mind (38% vs. 70% of seasoned investors) and twice as likely to invest for fun or to start a business.  

They’re more interested in cryptocurrency, with nearly one quarter of Gen I saying it will have a significant impact on how they invest in the near term, compared to 15% of seasoned investors. 

There is one area where Gen I and seasoned investors strongly agree though, and that is in the value they place on human support. Gen I believes people remain an important complement to technology when it comes to more personal or complex aspects of investing such as providing financial advice (64%), understanding their entire financial situation (63%) and creating a financial plan (54%).  

Survey numbers can reveal a lot, but we thought it would be fun to hear from an actual member of Gen I to learn about some real-life experiences and points of view about these findings. So we reached out to Michael Brady, an undergraduate aerospace engineering student at St. Louis University. He began investing in 2020.  

Here’s our conversation: 

SCHWAB NEWSROOM: What drew you to investing?   

MICHAEL: I had been interested in investing for a while but never acted on it until last year. There was so much going on in the stock market, and that reignited my interest. It was ultimately what got me to finally take action and get started.   

SCHWAB NEWSROOM: What kind of investments do you tend to favor?  

MICHAEL: I invest in what I’m interested in. As a junior at St. Louis University studying aerospace engineering, I’m primarily interested in technology and hold a number of tech stocks. I also know that diversification is important, so I’ve made a conscious effort to offset tech with other types of stocks as well.  

SCHWAB NEWSROOM: How do you get investing ideas? What sources do you trust the most?  

MICHAEL: I’m a pretty data-driven person, so I like to do my own research. I might get an idea from an article in the media, a post I read from a brokerage firm, or even something I see on YouTube. But from there I do my own research, dig into the stats, and make a decision of whether to buy or not.  

SCHWAB NEWSROOM: How often do you trade?  

MICHAEL: I was buying and selling more when I first got started, but more recently I’m doing more buying and holding. With my budget as a student, I’m slowly buying and adding more to my portfolio. While I’m not trading heavily, I’m always watching and thinking about what to add next. I also feel like as I’ve learned more about investing, I’m making better buying decisions and planning to hold on to those investments longer.    

SCHWAB NEWSROOM: How has your investment mix changed since you began investing?  

MICHAEL: I was very tech heavy when I first started. It’s what I’m naturally interested in, so it came easy. Expanding beyond that was a challenge because I had to do more research. I didn’t want to throw money at things without knowing what I was doing. As I’ve done more research, I’ve found some investments outside of tech which are interesting and help to balance my portfolio better. For example, I recently invested in a real estate company. Just a slice though (a partial share). 

SCHWAB NEWSROOM: Do you trade in options / futures? Crypto?  

MICHAEL: Crypto has definitely caught my attention. I do hold some, though not as much as I hold in stocks. I don’t trade options or futures.  

SCHWAB NEWSROOM: Would you consider yourself an early adopter of tech?  

MICHAEL: I’m not necessarily the first among my friends to adopt technology. I prefer to make sure it’s reliable before integrating it into my life. But when it comes to investing, I like to be more out front—investing in technology early. I like to speculate on what technology could take hold and am comfortable with the risk that comes with investments like that.  

SCHWAB NEWSROOM: How important is it to you to have access to human support?   

MICHAEL: I like all the data and functionality I get from technology, but there are times when having a person to help is really important. I had trouble transferring money into an account when I first started and having access to human customer service was really helpful. On the financial side, I feel like I don’t have enough money invested yet or very complicated needs, so I haven’t reached out to a financial advisor. But I could imagine at some point in the future finding that valuable.  

SCHWAB NEWSROOM: How do you think about your financial goals? Are you more long-term oriented such planning for your retirement, or short-term oriented such as making near-term profits?  

MICHAEL: My primary goal right now is to learn more about investing principles and strategies. So I guess it tends to be more short-term goals. But as I gain more understanding and my assets grow, I could envision how my goals and timelines could expand to more of a long-term view.

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This testimonial may not be representative of the experiences of other clients. This is not indicative of future performance or success. It stems strictly from the client’s direct experiences not from any services offered by Charles Schwab & Co., Inc. (“Schwab”)