Many experienced investors pulled their money out of stocks once the coronavirus pandemic began. These investors did so understandably, especially if they went through the financial crisis of 2008 and lost a significant amount of money during that time. However, just because these investors may be hesitant to put their money into the stock market doesn’t mean younger investors are shying away from investment opportunities. If anything, the market volatility created by the coronavirus pandemic has attracted more young investors than ever before. Here are some reasons why this may be the case.
Young Investors Haven’t Experienced An Economic Crisis Before
One of the theories as to why young investors are entering the stock market now is because they haven’t had to go through a financial crisis before. They would have been too young over a decade ago when the last crisis hit, so this is new to them from an investing perspective. Combine this with a young investor’s typical mindset of taking more risks and it’s easier to see why the market volatility has attracted them in recent months.
Technology Is An Attractive Factor In Investing
Technology dominates our world and is a part of virtually every part of our lives. This is true in the world of investing as well. Younger investors may have an advantage with certain investment opportunities because they utilize and rely on technology to get their information. Everything from specific mobile apps to help them track stock futures or fluctuations to chat rooms and social media platforms providing real-time information give tech-savvy people a big advantage. Experienced investors still use this technology to an extent, but it’s the younger investors who often can spend hours staring at a screen without getting burned out.
A Young Investor’s Relationship With Risk
All investment opportunities come with a certain amount of risk. These are considered to be risky times due to the high market volatility, which falls right into the personalities of many young people. If you think about it, a young investor likely doesn’t have as much money to lose as an experienced investor with a large portfolio that spans a couple of decades. So they generally see the risks associated with market volatility as opportunities to make a big splash with their investments since they have plenty of time to recover if they turn out to be failures. The combination of the information available via technology and a young person’s high risk tolerance leads to more investment opportunities being taken advantage of.
Stock Investing Info can help new and experienced investors navigate the market volatility created by the coronavirus pandemic. How you handle your investments during these times of uncertainty often comes down to your risk tolerance. Assessing risk tolerance isn’t always straightforward, and we can help you look at different factors in this area as well. If you have any questions about how market volatility should impact your investing strategies, contact us and we would be happy to help.