They may be the generation with the most debt worries, but it appears millennials are still finding ways to dive into the stock market and pile on risk.
A recent survey by Scottrade tracked the trading habits of different generations. It found millennials or Generation Y, on average, derived nearly a third of their annual household income from trading. Meanwhile, Generation X and baby boomers generated far less—about 20 percent of their incomes from the markets.
The online brokerage firm’s data also revealed millennials are placing a bigger emphasis on social analysis to make investment decisions in lieu of using more traditional, safer methods like fundamentals and technical levels.
But if they’re putting up money they can’t afford to lose, their entry to the market could be a time bomb.
Frank Murtha, managing partner at MarketPsych and an expert in behavioral finance, thinks Generation Y may be looking towards the stock market as a potential quick fix to their debt problems.
“There are few things more seductive than a rising stock market. I don’t care who you are,” said Murtha. “I think trading has always given the illusion of easy money.”
Source: CNBC | Stephanie Landsman | @stephlandsman
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