By Shane Cummings, CFP®, AIF®, Wealth Advisor & Director of Technology/Cybersecurity as featured in Kiplinger
Growing up with a smartphone in hand has made the use of technology for investing and retirement planning second nature for Generation Z.
It is said that Generation Z, individuals born in the late 1990s to early 2010s, is the first generation to grow up with smartphones and social media, making them inherent digital natives. This has led to a very different experience with investing and retirement planning for Gen Z, as they have access to many investing tools and technologies not available in the past. This shift presents both new opportunities and challenges in their investment journey.
Use of mobile apps
Investing and trading in the financial markets has never been more accessible. Mobile apps for your brokerage platform of choice are available on your smartphone, and you can place trades quickly and easily during market trading hours. You can even queue up a trade while the markets are closed. And if you invest in digital assets, trading is available worldwide 24 hours a day. Relative to how investors accessed the markets 50 years ago, access has been democratized, and trading costs have been substantially reduced.
Apps like Robinhood have offered equity trading for $0 and have ridden that business model to success. Similarly, other brokerage platforms, like Schwab and Fidelity, have reduced trading commissions to similar levels to compete.
Furthermore, technological advances have allowed more creative ways to invest, with platforms now offering fractional share trading. An example of fractional share trading is if, in the past, Apple shares were trading at $200, but you had only $100 to invest, you either had to save more before buying shares or hope the price dropped. With fractional sharing, you can buy a portion of Apple at $100 and participate as an investor.
Using your bank’s or individual budgeting apps allows you to track all your investments easily, especially if they are spread across multiple accounts, and typically see price changes in real time.
Individual stock trading and other assets
According to a recent 2024 Motley Fool survey, 37% of Gen Z investors own individual stocks and 22% own digital assets. A majority of Gen Z respondents say a high-performing portfolio should contain between one and five stocks. The same survey suggests that Gen Z investors trade more frequently than investors from other generations, with 70% trading at least once a month.
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