By Anna Peel. Originally published at ValueWalk.
A survey of 815 UK-based investors has revealed that the majority of young investors are more confident about their pandemic investment prospects for 2022 than more experienced investors. It found:
- 62% of investors aged 18-34 believe they will come out of the pandemic in a stronger financial position than before
- This is compared to just 30% amongst those aged 55+ and 43% of investors overall
Q4 2021 hedge fund letters, conferences and more
- 61% of younger investors view the pandemic as an opportunity to invest in new markets
- Just 12% of older investors share this enthusiasm for ‘new normal’ investments
- 57% say global warming and climate issues are likely to affect their strategy in 2022
- 56% plan to prioritise ESG investments, compared to 15% of investors aged 55+
Younger Investors Find Opportunity In Emerging Markets
The majority of young investors believe the pandemic presents new opportunities to invest in emerging markets that stand to thrive in the ‘new normal’, while older investors are shying away, new research by HYCM has found.
The trading broker commissioned an independent survey of 815 UK-based investors, all of whom have investments in excess of £20,000, excluding the value of their residential property, savings and workplace pensions.
It found that 62% of younger investors (aged 18-34) are confident they will emerge from the pandemic in a stronger financial position before – this is compared to only 30% of those aged 55+ and 43% of investors overall.
When surveyed about their investment outlook for 2022, the majority (61%) of young investors said they view the pandemic as an opportunity to invest in emerging assets and markets that stand to thrive in the ‘new normal’. Older investors were more risk-averse, with just 12% showing the same enthusiasm for new investment prospects driven by Covid-19.
HYCM’s research also showed that 57% of younger investors said climate change issues and global warming are likely to affect their investment strategy in the coming year, with similar numbers (56%) also saying that they will prioritise environmental, social and governance (ESG) investments within their strategy for 2022. These figures drop to just 15% and 16% among older investors, respectively.
Although 58% of younger investors said they had been making more short-term financial decisions throughout the pandemic due to prolonged market uncertainty, the vast majority (70%) did add that they are confident in how they are managing their finances and investments in the current climate. This figure is almost on par with that of their older counterparts (75%).
Adopting A Trader’s Mindset
Giles Coghlan, Chief Currency Analyst (HYCM) said: “After a tumultuous couple of years, it’s a pleasant surprise to see that the pandemic is breeding a new generation of investors keen to do more with their money, despite the challenges that persist. Clearly, younger investors are adopting a trader’s mindset, making snap-quick judgements about their finances and investments in reaction to a changing economy, where inflation is running hot and interest rates are rising fast, as well as making the best of new opportunities born out of the pandemic.
“According to HYCM’s research, in some cases, younger investors actually seem more attuned to the changing markets and are more confident about what to do with their cash than their older, more experienced counterparts. The alternative interpretation is that younger investors have grown accustomed to stunning stock market returns that are unlikely to be sustained and their optimism stands to be dashed by slowing growth.
“It is also interesting to note the disparity when it comes to ESG investing. Climate concerns are not going away any time soon, and younger investors – whether through a sense that opportunities await, or perhaps through a passion for ethical, sustainable investments – are evidently particularly focused on this investment sector.”
About HYCM
HYCM is an online provider of forex and Contracts for Difference (CFDs) trading services for both retail and institutional traders. HYCM is regulated by the internationally recognized financial regulator FCA. HYCM is backed by the HYCM Capital Markets Group established in 1977 with investments in property, financial services, charity, and education. The Group via its relevant subsidiaries have representations in Hong Kong, United Kingdom, Dubai, and Cyprus.
High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information, please refer to HYCM’s Risk Disclosure.
About the research
The market research was carried out between 11th and 17th January 2022 among 2,000 UK adults via an online survey by independent market research agency Opinium. Opinium is a member of the Market Research Society (MRS) Company Partner Service, whose code of conduct and quality commitment it strictly adheres to. Its MRS membership means that it adheres to strict guidelines regarding all phases of research, including research design and data collection; communicating with respondents; conducting fieldwork; analysis and reporting; data storage. The data sample of 2,000 UK adults is fully nationally representative. This means the sample is weighted to ONS criteria so that the gender, age, social grade, region and city of the respondents corresponds to the UK population as a whole. Within this sample, 815 respondents had investment portfolios worth in excess of £20,000 – this includes all assets from bonds and currencies to commodities and stocks and shares but excludes any property that is used as their primary residency.
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