Is age having any impact on investment avenue selection? Yes, there is. A recent study by JP Morgan Chase and co shows that the behavior of the retail investors during the pandemic varies significantly across age groups.
Investors always look for different investment avenues to reduce the risk and to make a good return. According to the study, the older generation is investing more in gold and gold-related investment avenues and the younger generation more interested in bitcoin. The study shows a trend that the younger ones embracing stocks especially technology shares while older ones selling equities. Despite the pandemic bond market which stood strong in both the months of June and July. This is because the older cohorts continued to invest their excess liquidity into bond funds.
In the last five months, Gold and bitcoin ETFs have been experiencing strong inflows. This because the older and younger generations see the case for an alternative currency. At the same time, the Bloomberg Doller Spot Index declined by about 1.7%. This situation has questioned the value of the dollar as well. The investment in Gold and cryptocurrencies are increasing because retail investors are more comfortable with that and they belives that this could be the alternatives to paper currency in the future. For hundreds of years, gold has dominated the safe-haven asset arena, while bitcoin was launched just over a decade ago and has only achieved widespread recognition in the last few years. Both gold and bitcoin are rare resources and both have very liquid markets where fiat money can be exchanged for them. Young generations are going with the trend in the digital world and the older one sticks with gold which is much more comfortable for them
Investors are now more concerned about the volatility of the market and actively looking for a way to shift their investment into more stable safe havens. Gold investments have proven that it could hedge against stock volatility. That is why still older generations stick with gold and gold-related investments. But the younger generations attracted to bitcoin because it gave a new definition to currency in the new era of digital currencies. Bitcoin, the leading cryptocurrency, has some unique features and many properties of currency, with that, could make it a viable haven. Gold and bitcoin investments have their own merits and demerits. So, the selection of the appropriate investment avenue as a suitable safe space in times of market trouble up to the investors.
