The biggest market risk in the minds of young retail investors is a crash in cryptocurrency value. Yet despite this, more than half (56%) still plan to increase their allocation to the likes of bitcoin.
The findings come from research conducted by Saxo Markets UK, a subsidiary of Denmark’s Saxo Bank.
It also found that young investors, aged 18 to 34, are still reliant on social media as their primary source of investment information with Reddit, Twitter and Facebook cited as the three most important media platforms.
The research comes just over a year after the emergence of a Reddit “army” of retail traders using online trading app Robinhood led to a meteoric rise in the value of GameStop.
It is also just less than a year that the UK’s Financial Conduct Authority issued a warning to young investors about buying into high risk investment products amid a concern over the growing influence of new investment apps and social media.
According to Charles White-Thomson, CEO of Saxo Markets UK, the research shows the emergence of a “quieter but more sustainable cohort of younger investors is emerging which will shape the future of investing for years to come”.
“Many such investors have, however, not witnessed a market crash or a major financial crisis, so it is critical that alongside their increased investment activity, they not only seek credible sources of investment information but also look to diversify their holdings to ensure that any recent gains are protected rather than wiped off,” said White-Thomson.