Generation Investors: Schwab Study

Business Insider, Financial Advisor, ThinkAdvisor, and Institutional Investor recently covered Charles Schwab’s Generation Investor Study with Logica Research. This study was conducted to show how—despite COVID-19, market volatility, and the many uncertainties of the economy—a new generation of investors appeared: Generation Investor (Generation I). 


Personal Investing Careers Shifting

As cited in an article by Business Insider covering the Schwab study, 15% of retail investors in the United States began their investing career in 2020. Individuals who began trading in 2020 are younger and more bullish than earlier retail investors, Institutional Investor states. 


Future Financial Planning

ThinkAdvisor’s coverage of the study talks about how—looking beyond the current crisis—52% of “Gen I” members say they will save more once the pandemic subsides, 43% plan to invest more and 42% will work to reduce their debt. This year, the Schwab study uncovered that 72% of respondents say they will buy and hold for long-term gain, compared with 56% who said this in 2020, and only 28% will trade for short-term gain in 2021, versus 44% last year. “They want to make informed decisions backed by education and professional guidance, which will be important as they navigate different life events,” says Andrew D’Anna, senior vice president for Schwab’s retail client experience.


Generation I (Investor) and Savings

According to the article about the Schwab study in Business Insider, more than 50% of Gen I have already started to build an emergency investing fund, and also strive to have an additional source of income. This new generation has also better kept track of investments than pre-2020 investors. “While it’s exciting to see this new generation of investors, the industry now has a call to action – to give this group the tools and services they need to be successful over the long term,” Jonathan Craig, Charles Schwab senior executive vice president said.


COVID-19 Impact on Investment

The Schwab study showed that Generation I was more financially affected by the Covid-19 crisis than those who invested before 2020, according to Financial Advisor. The article goes on to say that more than 60% of the Generation I group said the pandemic had a financial impact on them, 39% said their finances were hurt, 31% had a salary cut or reduced hours, and 26% lost their jobs or were furloughed.

To find out more information, you can read articles by Business Insider, Financial Advisor, ThinkAdvisor, and Institutional Investor.

Background: Logica Research conducted an online survey for Charles Schwab from February 1, 2021 through February 16, 2021. Those surveyed were 1,000 Americans aged 21 to 75, and an augmented sample of 200 investors who began their investing in 2020 for comparison.

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