The COVID-19 pandemic has seen the rise of Zoom calls, new hobbies and interesting DIY haircuts. It’s also seen a significant increase in the number of people investing for the first time.
With more-and-more of us looking for ways to grow our dough, we dug a little deeper into this phenomenon for our third Plum Talk.
To guide us through the ups and downs of investor behaviour over the past year, we assembled an expert panel including:
- Mindy Yu, Senior Director of Investments at Stash
- Alexandros Christodoulakis, CEO and co-founder of Wealthyhood
- Thanos Bismpigiannis, Head of Product Money at Plum
Journalist at CNN Greece, Dimitris Mallas, was also on hand to moderate the discussion.
As our panel reflected on the surge in investor numbers during the pandemic, they also looked to the future, to consider the top ten trends they think will continue to shape the investment landscape...
(1) Younger investors are here to stay 👶
All our panellists agreed that investors are getting a little more baby-faced, and Alexandros had a pretty jaw-dropping stat up his sleeve. 50% of new retail investment accounts opened globally were by people under thirty!
As he went on to explain, Millennials and Gen-Z are really shaking up the investment industry.
“These investors are used to a completely different experience that’s personalised. They want control over everything they use, and holistic solutions to their problems. They like taking a do-it-yourself approach, and are sceptical of authority”.
With this in mind, he offered some advice to the traditional investment platforms.
“This younger breed of investors is driving change in the market, and needs to be taken into account. Your main client will no longer be the 60-year-old investor who would consult a wealth manager or institution”.
(2) More women are getting invested 🙋♀️
Alongside investors getting younger, Mindy highlighted that more women are coming to table.
“On our platform today, 60% of our investors are male and 40% are female. In 2020, we actually saw that increase, with people signing on being 50% female and 50% male. That’s a really exciting turning moment”.
We agree with you there, Mindy. Although the gender investment gap is still very real, we can all play our part in supporting female investors, whether that’s celebrating their achievements or taking steps to even the score.
(3) We’re showing our finances some love 💜
The pandemic has truly transformed our lives, and our relationship with money, according to our panel.
As Thanos told us “People have had much more time to themselves, and have started focusing on their finances. They’re looking at them in a more careful way and are making better decisions around saving and investing”.
If we dare to dream of a post-pandemic future, Thanos believes that our money will still receive a lot of TLC.
“More than half of our customers aren’t planning on spending the extra money they’ve saved during the pandemic in the next 12 months. They’re also targeting bigger goals, like buying a house. They want something more significant from a financial perspective”.
That being said, the reopening of shops and pubs may prove too tempting to resist...
(4) And turning into investment nerds 🤓
Our panellists all raised the importance of getting educated when it comes to investing, and they’ve noticed we’ve been making the grade.
Over at Stash, Mindy has found that the company’s educational materials have been very well received. “We’ve seen people sticking to our investment philosophy. Stash has three pillars called ‘The Stash Way’ that people are actually following”.
In addition to this hunger to learn more about investments, Mindy has noticed that investing has become a conversation-starter.
“For me as a young woman and a young kid growing up, I didn’t talk about finances in my family. Now with resources available, and products that are educational, the door has opened to conversations about what you want to invest in and the companies you like”.
(5) Technology is driving change...or is it? 📱
In the not too distant past, you had to have a lot of money and an advisor to help you navigate the world of stocks and shares.
As our panellists pointed out, technology has changed this A LOT. Now there is a wealth of different investing apps at our fingertips, which means more of us can get involved in the market.
While technology has helped give investments a 21st century makeover, it’s not the only factor that has contributed to the popularity of investing.
As Thanos suggested, the current economic climate also had a hand to play. “We’ve been living for almost ten years with really low interest rates. It’s important to give people the opportunity to tap into the markets to make sure they don’t lose the value of the money they save”.
(6) European investors are on the rise 🇪🇺
If we had to pick an investing hotspot, a lot of us would point to the United States. And, in many ways, we’d be right for doing so.
“North America was always the main driver of these initiatives. If you look back with a banking and Fintech perspective, that’s where investing apps started from”, Thanos reminded us.
Across the pond in the UK, we’ve followed closely on the US’ heels, but what about the rest of Europe?
According to Thanos, we’re now starting to see investing tech become popular on the Continent.
“As Plum has been expanding into Europe in the last few months, we’re getting a lot of demand around an investment product. People have seen our UK version and are aware of opportunities that exist beyond the borders of their own country”.
(7) Trades are getting a little...crowded 👥
The pandemic has made us forget what crowds are like, but they have still been forming in the investment world.
Lots of investors have been piling onto particular stocks and assets, and, luckily for us, Alexandros gave us a recap of all the main action.
“Over the last year we’ve seen bets on big tech pandemic winners like Netflix and Zoom, pharma and biotech companies racing for COVID-19 vaccines, new IPOs and electric vehicles”.
Our panellists agreed that these so-called “crowded trades” can, in part, be attributed to the younger age of investors.
As Thanos explained, “A lot of our customers will either invest in things they understand better, or that they believe in. They know technology, they grew up with the internet, so putting money on something you really know makes sense from an individual perspective”.
(8) Extreme share behaviour 📈
Anyone remember the GameStop frenzy? Back in January, retail investors drove up the share price of the American company in an example of extreme share behaviour.
For Alexandros, this was a red flag. “It’s a bit concerning that people are now buying stocks or assets just because they believe someone else will buy the same stocks and assets. There is a detachment from fundamentals that’s been a huge trend across the pandemic”.
Yet the GameStop saga wasn’t entirely negative. As Mindy pointed out, “There was a lot of attention driven to investing in general, which is great. Investing is an important component of wealth generation and maintenance. Having some light shed on it was beneficial”.
(9) The future is bright for ETFs 💡
Exchange Traded Funds (ETFs) are a type of Index Fund. This means that they’re a collection of securities that are designed to mirror the performance of a particular market (e.g. the FTSE 100) overall.
Our panel all agreed that, looking to the future, ETFs are on the up and up in terms of their popularity.
As Mindy shared with us, they effectively allow investors to kill two birds with one stone.
“There’s been a lot of ETFs out there that invest in certain themes that really engage interest. In the US, we have a big focus on infrastructure spending, so electric vehicles, for example, is a theme that people are investing in. People are also finding it easier to diversify by buying this thematic ETF that invests in the whole landscape”.
With ETFs on the rise, both Alexandros and Thanos had some exciting news for all Wealthyhood and Plum investors out there. Both companies have plans to add ETFs to their platforms, so watch this space!
(10) The crypto road is looking bumpy 🛣️
We couldn’t end our Plum Talk without mentioning cryptocurrencies, yet there was some disagreement among our panel on how they’ll develop.
Turning to his crystal ball, Alexandros told us that “In the next five to ten years, the crypto market will be higher, but it will drop before reaching extreme levels. A correction is necessary to reverse what actually matters in a decentralised economy”.
For Thanos, however, it’s not all boom and bust for cryptocurrencies. “Their adoption by big companies and institutions may help them become a more mainstream asset in the near future”.
We’ll have to wait and see what happens next, but, in the meantime, we hope you enjoyed the third installment of our Plum Talks!
And if you do decide to invest then please remember that your money is at risk because the value of your investment can go down as well as up.
If you’d like to find out more about our online events series, head on over to our website where you can sign up to hear when our next talk will be dropped.