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Younger Investors are More Speculative in Their Investing

According to the latest BCSC research, young adults today are increasingly taking on more risk by investing in specific companies.

Young adults today are increasingly taking on more risk by investing in specific companies, according to new research commissioned by the BC Securities Commission (BCSC).

The national survey reveals how 18- to 24-year-olds are different from older adults when it comes to investing, and even how different they are from 18- to 24-year-olds of just a few years ago.

Over the past four years, the youngest adults in BC, as well those between 25 and 34 years old, have increasingly owned stocks of individual companies. While that upward trend is present among all age groups, the increase is most pronounced among those under 35 and barely perceptible among those over 55.

Owning individual stocks – as opposed to a basket of stocks through a mutual fund or exchange-traded fund (ETF) – indicates a more speculative approach to investing, as well as greater confidence by today’s younger investors in their ability to spot profitable opportunities.

Young adults are more likely than those 25 or older to:

  • say they are aiming for a large return and a big profit;
  • think it’s generally possible to time the market;
  • trade at least once a week;
  • say they often trade more to win back losses;
  • say they often trade larger amounts to maintain excitement;
  • and say they often are thinking of ways to get more money to trade.

Young adults are less trusting of traditional investment professionals and are more likely to seek information on platforms like YouTube, Instagram, and TikTok. Only 23% of young investors work solely with advisors, compared to 40% of Canadians overall.

Young adults are more likely than any other age group to self-manage some or all of their investments, with about half self-managing over 50% of their investments. Young adults invest in higher-risk financial products, such as options or mortgage investments, at a higher rate than investors generally.

The COVID-19 pandemic, media exposure, economic conditions, and new technologies are likely contributing to changed approaches to investing for young adults.

The full research is available here.

About the Survey

This online survey was conducted for the BCSC by Innovative Research Group among a representative sample of Canadian and British Columbians from September 26 to October 5. A total of 3,789 Canadians age 18 and over completed the survey, which was weighted to a representative sample of 2,000. The survey included oversamples of 1,385 Canadian young adults (weighted to 1,000), 1,458 BC adults (weighted to 1,000), and 540 BC young adults (weighted to 500). Weighting ensures that the overall sample’s composition reflects the actual age, gender, and geographical location of the Canadian population according to Census data.

Report a Concern

If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Contact Centre at  604-899-6854 or 1-800-373-6393, or through email at [email protected]. You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.

InvestRight.org is the BC Securities Commission’s investor education website. Subscribe to receive email updates from BCSC InvestRight.

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