Gen Z and millennials are known to be risky investors and are more likely to invest in assets like crypto, NFTs and tech-related stocks than other generations. But surprisingly, gold and silver are becoming increasingly popular investment options for millennials and Gen Z.
Here’s a closer look at why some younger investors are turning to these typically stable investment options rather than venturing into the less-charted territory of cryptocurrency and NFTs.
Young Investors Are Utilizing Online Resources
More so than previous generations, young investors turn to online resources to educate themselves on how to expand their wealth. Millennials and Gen Z keep up with the latest in the world of investment with the internet, and information has spread regarding gold and silver as a viable way to diversify a portfolio.
Another factor that influences young investors’ decisions is FOMO, or fear of missing out. When young investors see their peers hop onto new investment options, they tend to follow suit.
Gen Z and millennials also typically use online tools to get started with investing.
“The rise of digital investment platforms has made it easier for young investors to purchase gold and silver, even if they don’t have large amounts of capital to start with,” said Edith Reads, a senior editor at TradingPlatforms, an investment news website.
Gold and Silver Add Stability
Gen Zers and millennials, like all people, are looking for ways to find stability in times of uncertainty. Gold and silver are favored investment options that have a proven track record of stability.
“Gold and silver are seen as stable investments that can serve as a hedge against inflation and market volatility,” Reads said.
However, while gold and silver are known for being consistently profitable, young investors should make themselves aware of the risks of investing, even in regard to something as relatively stable as precious metals.
As Gen Z and millennials continue to build their investment portfolios, they learn of the benefits of portfolio diversification.
“Like any investment, the value of gold and silver can fluctuate based on a variety of factors, including global economic conditions, geopolitical tensions and supply and demand,” Reads said. “However, gold and silver can serve as a good diversification tool in a well-rounded investment portfolio.”
By spreading investments across different assets, young investors avoid putting all of their eggs in one basket and can maximize potential profit while preventing devastating losses.
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