Here’s Who’s Buying The Stock Market Drop, According To The Poll

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Market volatility and the record inflation we’ve seen this year are sending investors in different directions.

According to a recent Bankrate survey, younger investors are likely to benefit from the economic turmoil and increase their investments this year. Over 43% of Generation Z investors (ages 18-25) and over 27% of Millennials (ages 26-41) plan to invest more this year than last year, compared to 18% and 14 % respectively, who plan to invest less.

Meanwhile, the survey shows that only 14% of Gen X investors (ages 42-57) and 8% of baby-boomers (ages 58-76) plan to supplement their investments in 2022, compared to 16% and 22%, respectively, who plan to invest less.

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Small investors buy dip

The difference we see between the younger and older age groups in this survey can be partly attributed to the fact that older investors are likely to reduce risk tolerance as they approach or continue into their retirement years. Meanwhile, younger investors have time on their side and can actively add more to their portfolios, buying shares at a discount amid increased volatility and inflation.

“Generation Z and millennial investors who want to invest more in stocks this year, despite market volatility and inflation, can see a greater long-term return for the discipline of holding on and buying more at lower price points,” Greg McBride, chief financial analyst and senior vice president at Bankrate, in the company’s press release.

These younger investors who are buying the pullback are planning something, as long as they are okay with keeping their money in the market for at least two years. Conventional investing wisdom—and even Warren Buffett—suggests selling when others are buying and buying when others are selling. A good option in this market is dividend-paying stocks that provide passive income through free stock trading platforms, including TD Ameritrade, Ally Invest, E*TRADE, Vanguard, Charles Schwab, and Fidelity.

If you have $10,000 or less to invest this year, it’s worth considering an almost risk-free I bond to record an annual interest rate of over 9%, which is what it was at the time of writing. Investors can purchase I bonds through the US Treasury website — up to $10,000 each year, plus an optional additional $5,000 if they put their tax return in paper bonds.

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Editorial note: The opinions, analyses, reviews or recommendations contained in this article are those of the editorial board alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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