It appears that an increasing number of young Australians are stashing their cash in the stock market in a bid to build wealth and get a foot on the property ladder.
AAP reports that millennials now make up almost 30 per cent of active CommSec accounts, representing 70,000 trades per month.
‘As we all know it is becoming more and more difficult to save for a house so part of the reason millennials are turning to the share market is to grow their savings,’ CommSec managing director Paul Rayson said.
‘The share market can be a way to build savings and wealth over the longer term,’ he said.
Given the low-interest rate environment, young people are investing in blue-chip stocks where they can earn four to five per cent in return. While some millennials play it safe, others have an appetite for risk and invest in shares that have higher growth potential but are more volatile. Young Aussies have a higher allocation to growth stocks and companies that are in high demand in China like Blackmores and Bellamy’s.
‘I think part of it is they are interested in technology, growth stories and the new economy and that is why they are prepared to have a higher allocation to some of these growth stocks.’
Millennials make up 50 per cent of all mobile trades made through the CommSec mobile app.
‘They are every comfortable engaging in mobile technology and just like many other areas of their life they can take control of their finances,’ Mr Rayson said.