In a remarkable shift, 46% of Gen Z investors have ramped up their stock market engagement over the past quarter, eclipsing millennials at 33%, Gen X at 21%, baby boomers at 13%, and a mere 3% of the silent generation. The surge is even more pronounced in the ownership of Australian equities, where the 18 to 27 age group has seen a 15% quarterly increase, now at 39% ownership.
According to Josh Gilbert, a market analyst at eToro, one cornerstone of Gen Z's investment strategy is the extended "time horizon" they have before them. He noted, “Looking how far these guys have to invest, they have a lot more time on their side to be able to move into equities.”
Owning shares involves purchasing equity in public companies via brokerage platforms, with the potential for price fluctuations based on company performance and market conditions. For context, an investment of $10,000 in Commonwealth Bank five years ago would now be approximately $17,300, while REA Group has seen a similar investment grow to $19,800—figures that illustrate the long-term growth potential fueling Gen Z’s interest.
Yet, alongside stock investments, cash reserves among young investors have grown by 14%, reaching 72% over the same quarter. Josh Gilbert highlights this dual approach: "We’ve either got them staying in cash because you have got a very difficult period at the moment for young people in Australia," reflecting on the complexities of high rents and inflation.
This sentiment underscores why some of these young Australians are turning their gaze from thriving U.S. markets back to their roots in search of value and stability. As per Gilbert, geopolitical issues affecting American markets add to the allure of holding domestic equities: "I think there is a little bit more value at home than there is overseas," he commented, noting that phases of uncertainty often tinted by global events and impending U.S. elections may nudge Gen Z further towards trusted local options.
Another driving force propelling young investors is the vibrant financial discourse. Gilbert points out, “People are more open about speaking about money than they have in previous years," with topics once brushed under the carpet now ripe for discussion in social settings.
According to data sourced from eToro, involving a global survey of 10,000 retail investors (including 1,000 Australians), Gen Z continues to demonstrate adaptability and confidence, empowered by resources and community channels that demystify investing. Confidence gleaned from peer conversations trifles with the stereotype of Gen Z being hands-off with finances; many are keen on pursuing equity investment, albeit starting small, such as with index ETFs like S&P 500.
In capturing this trend, Gen Z represents not just a fraction of retail investors but an evolving class rewriting norms through informed, tenacious, and local-focused investing—a step forward that signals broad changes for future economies and embedding sagacity in their roots.
