Gen-Z and Millennial investors' risk tolerance is at a pandemic-era high and their confidence is increasing, an E*Trade survey shows

Gen-Z and Millennial investors' risk tolerance is at a pandemic-era high and their confidence is increasing, an E*Trade survey shows

June 4, 2021

Amanda Perobelli/ Reuters

  • A small survey by E*Trade suggests younger investors are taking riskier bets, are trading more often, and are more confident than they were before the pandemic.
  • 72% of investors under the age of 34 said they are confident in their portfolios, an increase from last year.
  • E*Trade surveyed 273 investors under 34 in April as part of its quarterly tracking study.
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A small survey by E*Trade suggests that younger investors are taking riskier bets, are trading more often, and are more confident than they were before the pandemic.

In an April survey of 273 investors under the age of 34, 72% of respondents said they are confident in their portfolios, a 16 percentage point year over year increase.

Not only are investors growing more confident, but their attitudes toward risk are more aggressive. 70% of Gen-Z and Millennials said their risk tolerance increased within the last three months, 19 percentage points higher than the third quarter of 2020 when E*Trade first asked the question.

Gen Z and Millennial investing ballooned during the pandemic as investors were stuck at home, emboldened with commission-free trading apps, stimulus checks, and a bull market that echoed the popular retail saying "stonks only go up."

According to E*Trade, 58% of investors under the age of 34 are trading stocks more frequently in the last three months, and 55% of investors said they are trading derivatives more frequently.

Younger retail investors on social media have helped drive up the prices of meme stocks and cryptocurrencies like AMC, GameStop, Bed Bath and Beyond, and dogecoin.

Earlier this week, former E*Trade CEO Karl Roessner told CNBC the retail traders driving the meme stock frenzy are "here to stay," though the current rally in AMC "isn't going to end well." The movie-theater chain is up over 2300% year-to-date.

From April 1 to April 12, E*Trade surveyed 273 active investors between the ages of 18 and 34 who manage at least $10,000 in an online brokerage account, as part of a larger quarterly tracking study. It was fielded and administered by Dynata.

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