What are today’s hottest stock options? If you look at the traditional market, you will get one answer. However, if you ask the millennials, you might get a completely different answer. Research indicates that this generation has specific tendencies when it comes to investing, and they don’t always match long-standing market advice. Anyone interested in investing in today’s hottest stock options should take a look at what the millennials are doing.
Tech that is Down in Value is Among Hottest Stock Options
Millennials are investing in tech stocks that are on the decline in the general market. For example, take Apple. Apple’s value in the market has gone down considerably, dropping nearly 20% in the past year. However, Investopedia reports that after Apple’s stock took a huge dive a few months ago, it became the number one stock to buy on the Robinhood app.
Similarly, things have looked bleak for Facebook thanks to myriad troubles in the company. However, it continues to be a popular stock choice among millennials. In other words, they see this as an opportunity to get a good price on a popular company that may or may not make a strong comeback. They’re hedging their bets that these tech giants will soar again.
It’s not just relatively new tech that has millennial attention. Microsoft, GE, and Ford are among the hottest stock options. The value of the latter two companies dropped considerably in the last year. Millennial investment in those stocks increased proportionally.
Cannabis Companies are Worth an Investment
As laws have changed around the United States and Canada, the legal cannabis industry has begun to boom. Millennials are eager to invest in this emerging industry. Research indicates that this generation likes to support causes that they believe in. Therefore, some of this investment might be due to the popularity of the cannabis industry among this generation. However, more likely, interest is motivated by the financial possibilities of getting in early with a sector poised for huge growth.
Millennials are willing to make this investment whether or not stocks are up. For example, in 2018, Cronos Group saw a 36% increase in value and a similar increase in millennial investment. However, they stick to the trend of preferring to purchase stocks when they are down. To that end, Aurora Cannabis was down more than 50% last year, but millennial investment soared by over 370%.
Millennials Aren’t as Risk Averse as Portrayed
The long-standing rumor has been that millennials saw the economic crash of 2008 and became risk-averse in response. While there is some truth to that rumor, it no longer holds much water when it comes to where millennials are willing to invest their money. Millennials are increasingly willing to take risks on certain stocks, provided that they meet one or more of the following criteria:
- High investment potential in an emerging field. For example, cryptocurrency including Bitcoin is a highly popular millennial investment.
- Socially Responsible Investing (SRIs). Millennials are the group most likely to invest in stocks related to social justice and sustainability.
- It matches their personal interests. If a millennial is passionate about something, they will put their money into it.
Stocks Aren’t the Only Way to Invest
Tech, cannabis, and other emerging industries may be among the hottest stock options. However, millennials aren’t putting most of their money in stocks. They’re diversifying their investments. Smart millennials balance stock investing with other options including maxing out company matching opportunities for 401(k) savings.