Pandemic Created ‘Generation Investor,’ Schwab Says
Number of the Day: The most relevant or interesting figure in personal finance
That’s the share of U.S. stock market investors who only just started investing in 2020, according to a new Charles Schwab survey.
Retail investing has soared since the start of the pandemic, but surveys like Schwab’s offer insight into just how new it is for some, and what types of people are in the market on their own. The freshman class includes investors likely drawn by newbie-friendly free trading tools and the kind of wild price swings seen this winter when insurgent investors egged one another on to buy stocks like Gamestop. But they’re not all young and they’re not all focused on the next “hot stock,” according to findings published Thursday from the February survey of 1,000 Americans 21 to 75.
The investors who joined in 2020, which Schwab has dubbed “Generation Investor,” have a median age of 35 (compared to the median age of 48 among investors overall), but 22% of the new class are Generation X (40-55) and 11% are baby boomers (56-74). They also are evolving their trading strategy, having shifted further away from short-term gains: 44% said their 2020 investments reflected trading for short-term gain versus buying and holding, whereas just 28% plan to go that route in 2021. And compared to veterans, a bigger share of rookies are optimistic about the stock market and plan to devote more time (and money) to investing.
“Overall, these new investors are responsible and focused on becoming successful long-term investors,” Andrew D’Anna, senior vice president of Schwab’s retail client experience, wrote in an email.