Data shows that younger investors with smaller pockets and greater access to technology have revamped investing during the historic Retail Revolution
JERSEY CITY, N.J., April 20, 2022–(BUSINESS WIRE)–DriveWealth, LLC, a pioneer in fractional investing and embedded finance, today released “The New Investor Phenomenon: A Wave of Opportunity,” a guide to understanding the mindset of the global retail investor. Spurred by the onset of COVID-19, the Retail Revolution marked a new era where huge swaths of investors entered the markets and changed what it means to be an “investor.” While their investing behaviors might seem like an anomaly, DriveWealth’s guide reveals insights about the psychology behind their trades–their motivation to participate in the markets, the tools they’re using to trade, and the tools they still need to take on the decade of the digital investor.
Key findings from DriveWealth’s guide include:
Remote living resulted in remote investing: While capital markets were undergoing a mobile technology revolution during the years leading up to COVID-19, the sudden, total shift to remote living drastically accelerated that transformation and created opportunity for a new generation of investors. 35% of active investors got their start during the pandemic, including those in emerging markets like South Korea (56%), Indonesia (53%), India (51%), and the Philippines (48%).
New investors skewed young: About half of all Gen-Z investors opened their first account during the time period of March 2020 to August 2021, with 59% of this generation opening their first account in LATAM, 68% in APAC, 63% in the Middle East, 49% in Africa, and 23% in the U.S. Across all regions, the percentage of investors with less than $10,000 who made their first investment during this period was significantly higher than all other wealth tiers.
Tech-savvy investors turned digital: Technological advances and market forces helped drive this new wave of investors. Across all regions, more than 40% of investors opened their most recent investment account on a mobile app and 31% traded digital assets as their first investment. Regardless of available technology, in 18 of 23 markets surveyed, the most common motivation to start investing was low account minimums.
“This new paradigm of investing is being driven by factors that are breaking down the traditional barriers to investing. Embedded finance …….