Description: Due to spending more time online in 2020, it seems that millennials are now exploring the world of trading as some have likened it to playing video games.
Overview of trading post-2020
Despite the unprecedented conditions of 2020 and the impact it had on not just employment opportunities, but also people’s sources of income and general morale, trading on financial markets has never been more appealing. Initially, the stock market felt the impact of the drop in global economic activity and instability, coupled with the restrictions on international trade and relations.
In the latter part of 2020 and the beginning of 2021, the world’s economies started recovering and bouncing back, although still with some level of uncertainty and risk. That being said, people were actively looking for various ways of making money and investing, especially from the comfort of their own homes. This is mostly the reason for the growing interest in trading in recent months, although the financial markets have been attracting new investors for the past few years.
Perhaps one of the main reasons that the interest in trading has been more evident in recent years is that it allows both young and old, novice and experienced to try their hand at potentially lucrative avenues. It is important to note that financial markets extend to beyond just foreign exchange, as the stock market is an equally appealing option. However, new beginners trading forex generally prefer it as a starting point before stocks, which some might find intimidating.
Millennials exploring financial markets
Due to how the financial markets are not based on one’s age, it is no surprise that even the youth, particularly millennials, are venturing into it. For many millennials, online trading is a side hustle, a way of making additional income while pursuing other more conventional and traditional ways of earning money.
Although, this is not to say that trading cannot be pursued on a full-time basis, as day traders are gradually becoming more prominent in various parts of the world. According to reports, some millennials started gravitating towards trading because 2020 saw them spending more time online, be it for studies or exploring ways of making money online, and they then drew parallels between gaming and trading on financial markets.
As such, trading was introduced to some of them in a way that was familiar to them, i.e. through a leading trading app that has been built like a video game. Some described the process as user-friendly and fun after opening their trading accounts and doing a bit more research on how to truly capitalise on market activity.
Writings on the matter suggest that the prevailing investment style of millennials and Gen Z is to buy momentum stocks. This means that they identify and invest in fast-moving stock with the hope of soon reaping the desired rewards. A notable reference of this is the recent interest in GameStop, which was a highly contentious matter.
Despite this, it has not deterred the youth from trading, although some are indeed now more cautious. A phenomenon that is prevalent amongst young traders is meme stocks, which are stocks whose values are driven by online conversations that generate an interest in a certain entity.
Opponents of such have highlighted that these are temporary fads that are not indicative of the company in question’s real value, however, it seems that short-term investors find this appealing and worth investing in as they are only looking to make some sort of return on their investment for the time being.
Blake is a self-made online day trader with a knack for adventure. On his free time, he loves reading and learning new methods in the trading as well as improving his jiu-jitsu skills. He currently resides in New York City.