Why millennials are flocking to these hot stocks

Millennials swell to 73 million as Boomers decline to 72 million

This year millennials have overtaken baby boomers as America’s largest living adult generation, according to population projections from the U.S. Census Bureau. This will have implications for how financial services are consumed now and in the future.

A new report called the Apex Millennial 100 takes a deep dive into the “unique investment behavior of a new generation.” It analyzed over 658,000 accounts held by millennials, which had more than 8,000 different stock holdings.

Apex CEO says that as “millennials mature into savvy investors, their evolving interests and values will shape a new wealth management industry, one that looks a lot different from the traditional model.”

Top 10 stocks held by Gen Y

Here is a list of the top 10 stocks most favored by millennials. Notice how heavily its concentrated on the high tech industry. πŸ™‚

Maybe it shouldn’t be surprising how many digital companies are on the list. As famous investor Peter Lynch suggests, you should always invest in what you know. You must value the business in order to value the stock. And these are the type of companies you would expect millennials to know most intimately about. I personally interact with several of these companies on a regular basis. πŸ™‚ You can see the entire list of 100 stocks here.

Some trending stock themes from the report include:

  • An increased focus on Canadian cannabis companies, which demonstrates the growing role marijuana may have on the medical and lifestyle decisions of millennial investors.
  • Chinese companies are leading the pack as millennials, who consider themselves to be global citizens, take the long view on international investments.
  • IPOs: Millennials consistently show support for companies that mirror their personal ideologies and offer products and services they understand and value, and will jump to invest in companies like Uber, Lyft and Slack as soon as they go public.

I can understand why other millennials are choosing these companies since I have a similar inclination to do so. I have fewer than 100 stocks in my portfolio. But somehow I hold most of the top 10 companies from the report. One of the most recent stock I purchased was Alibaba Group (BABA) which is already 15% higher since I bought it a couple of months ago. πŸ˜€ I guess I’m an example of your typical millennial investor. πŸ™‚ The only stocks I don’t own on that top 10 list are Tesla, Berkshire Hathaway, and Microsoft.


Random Useless Fact:

According to Reuters, California and Texas are the 2 states with the highest number of school shootings.

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Dividend Diplomats
08/19/2019 5:26 pm

This list doesn’t surprise me one bit. I think it’ll take a little longer for Cannibus companies to catch on the way the tech companies have. Did this article have anything have anything about coins or coin offerings?

I wonder what this chart would look like throughout the decades. I’d imagine people in their 20s in each decade would have invested in the fad. The 80s would have conglomorates/companies that were merger happy, 90s dot com/banks/others, and so on. But in the end, I don’t chase the trend. I look for old reliable companies that have increased their dividend through each boom and bust cycle.

Thanks for the great read!


08/20/2019 5:41 am

Well I wouldn’t call tech companies ‘a fad’. Amazon, Apple, Google…these are the companies that are literally the driving force behind the most powerful economy in the world. To act like old companies like MMM are somehow going to hold up better the next decade or two just because they did in the past is a bit optimistic or even short sighted. Not saying the only companies that have value are the big tech companies, but its not ‘a fad’.

Wayne Lam
Wayne Lam
09/02/2019 7:54 pm

Thanks for the share! Unsurprisingly, I also hold stocks for most of the companies in this report. I don’t own Netflix, Berkshire, Alibaba, or Tesla. I sold Disney the day after Investors Day.

I think one of the significances of this post is that it goes back to a classic hedge funds way of thinking: if you can predict where the next cash inflow is going to go, you’re essentially “smart money” (which is why hedge funds are always trying to figure out what other hedge funds are planning to invest into).

So the big takeaway from this post is – what are millennials going to pour their money into -next-?

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