Members of Generation Z (age 18 to 24) and millennials (25 to 40) can more easily access the stock market and other investments than any previous generation. 

So, what are they investing in?

In April 2021, The Motley Fool surveyed 1,400 investors aged 18 to 40 about the types of investments they own, what types of stocks they own, what sectors of the economy they're invested in, and what factors they consider when determining whether to buy a stock. 

We found that Gen Z and millennial investors invest in a mix of traditional and newer asset classes, stock types, and sectors. And despite the recent media attention on SPACs, IPOs, and meme stocks, most young investors are unlikely to hold those types of stocks.

Key findings

  • Gen Z and millennial investors bridge new and old investing strategies: Investors aged 18 to 40 are most likely to hold stocks -- especially growth and dividend stocks -- and value historical stability. But they're also invested in cryptocurrency and stock options, and members of Gen Z value social-media-based sources of information.
  • Stocks are king: 73% of Gen Z investors, 66% of millennial investors, and 67% of investors aged 18 to 40 overall own stocks, making them the most common type of investment in this age group.
  • Cryptocurrency moves toward the mainstream: 40% of stock investors aged 18 to 40 own cryptocurrency. 47% of Gen Z and 39% of millennial respondents said they hold this new asset. 
  • Growth and dividends are high priorities: 58% of respondents own growth stocks, and the same proportion reported owning dividend stocks. They're the most popular types of stock held, with value stocks a close third.
  • Meme stocks register low interest: Just 30% of respondents own meme stocks, making them the third least popular type of stock among all respondents.
  • ESG stocks haven't caught on yet: 25% of Gen Z and millennial investors reported owning ESG stocks, while 32% said they don't know what an ESG stock is.
  • Gen Z and millennials are betting on tech: Respondents were most likely to hold stocks in the financial (42%), information technology (40%), and high-tech/emerging technology (38%) sectors.
  • Buying based on historical stability: Investors aged 18 to 40 rated historical stability as the most important factor in determining whether to buy a stock. Social media buzz and influencers were the least relevant factors.

Two-thirds of young investors hold stocks, 40% hold crypto

Gen Z and millennial investors were more likely to own stocks than any other asset class, with roughly two-thirds of respondents reporting owning stocks. Members of Gen Z were slightly more likely to own stocks than millennials. 

No other type of investment was held by more than half of our respondents. 

Mutual funds were the second most common type of investment among investors aged 18 to 40, with 45% of respondents invested in them.

While members of Generation Z were more likely than millennials to hold stocks, millennials were more likely than Gen Z investors to be invested in mutual funds -- 47% of millennial investors reported being invested in mutual funds compared to just 35% of Gen Z. 

40% of respondents reported owning cryptocurrency, making it the third most popular type of investment -- and beating out bonds, options, index funds, ETFs, and other types of investments.

Which of the following types of investments do you own?

 

Gen Z (aged 18 to 24)

Millennials (aged 25 to 40)

All investors aged 18 to 40

Stocks

73%

66%

67%

Mutual funds

35%

47%

45%

Cryptocurrency

47%

39%

40%

Bonds

30%

35%

34%

Stock options

39%

30%

31%

Index funds

22%

25%

24%

ETFs

15%

23%

22%

Fractional

shares

16%

22%

21%

IPO shares

13%

14%

14%

Other

1%

2%

2% 

Gen Z investors are more likely to hold cryptocurrency and options

Cryptocurrency was the third most popular type of investment among all respondents and the second most likely to be held by Gen Z investors.

47% of Gen Z investors held cryptocurrency at the time of our survey, compared to 39% of millennials. 

Male investors aged 18 to 40 were also more likely to hold cryptocurrency than female respondents -- 46% of male respondents reported holding that type of asset compared to just 33% of female respondents.

As cryptocurrency remains in the spotlight, it's important for investors to be aware of the unique risks and upsides to digital currencies. 

Members of Gen Z were also more likely to own options than mutual funds and bonds, the second and fourth most owned types of investments among all respondents. 39% of Gen Z owned options compared to just 30% of millennials.

47% of millennials are invested in mutual funds compared to 35% of Gen Z

Our results suggest that millennials are more likely to invest in assets that are diversified by design. 47% of millennials were invested in mutual funds compared to just 35% of Gen Z, making that type of investment the second most popular among millennials behind stocks. 

Millennials also favored exchange-traded funds (ETFs) compared to Gen Z -- 23% of the former generation owned ETFs compared to just 15% of the latter.

58% of young investors own growth and dividend stocks

In terms of types of stocks that investors aged 18-40 owned, we were pleased to see interest in a healthy balance of growth stocks, dividend stocks, and value stocks. 

Growth stocks and dividend stocks were the most popular among respondents, owned by 58% of investors aged 18 to 40. Millennials were more likely to own dividend stocks than Gen Z. 

Value stocks were owned by 56% of respondents, with Gen Z and male respondents being more likely to own them compared to millennials and female respondents. 

Despite the media coverage and social media buzz, SPACs and meme stocks were the second and third least popular types of stocks owned. Environmental, social, and governance (ESG) focused stocks were last on the list, with only 25% of respondents saying they owned this type of share. 

Those three types of stocks were also among the least understood stocks. 32% of respondents said they didn't know what an ESG stock was and the same percentage had the same response when asked about SPACs, making them the least understood stock types. 24% of respondents said they didn't know what meme stocks were. 

Which types of stocks do you own?

   

Gen Z

Millennial 

Male

Female

All investors aged 18 to 40

Growth stocks

Yes

57%

58%

63%

53%

58%

No

32%

25%

29%

22%

26%

Don't know what this is

11%

17%

8%

25%

16%

Dividend stocks

Yes

50%

59%

60%

56%

58%

No

39%

29%

33%

28%

31%

Don't know what this is

11%

11%

7%

15%

11%

Value stocks

Yes

64%

54%

63%

48%

56%

No

24%

26%

27%

25%

26%

Don't know what this is

12%

19%

10%

28%

19%

Small-cap stocks

Yes

40%

48%

52%

42%

47%

No

46%

32%

38%

29%

34%

Don't know what this is

13%

20%

9%

29%

19%

Large-cap stocks

Yes

44%

43%

50%

35%

43%

No

43%

38%

40%

37%

38%

Don't know what this is

13%

20%

10%

28%

19%

Penny stocks

Yes

48%

40%

44%

37%

41%

No

42%

47%

48%

44%

46%

Don't know what this is

11%

13%

7%

19%

13%

IPO stocks

Yes

35%

39%

46%

31%

39%

No

47%

42%

44%

41%

43%

Don't know what this is

18%

19%

10%

28%

19%

Blue chip stocks

Yes

29%

37%

45%

26%

36%

No

45%

38%

40%

37%

39%

Don't know what this is

26%

26%

15%

37%

26%

Meme stocks

Yes

39%

28%

35%

24%

30%

No

42%

47%

51%

41%

46%

Don't know what this is

19%

25%

14%

35%

24%

SPAC stocks

Yes

29%

26%

32%

19%

26%

No

47%

41%

47%

37%

42%

Don't know what this is

24%

33%

21%

44%

32%

ESG stocks

Yes

30%

24%

32%

17%

25%

No

49%

43%

46%

41%

44%

Don't know what this is

21%

33%

22%

42%

32%

39% of Gen Z own meme stocks compared to 28% of millennials

Only 30% of respondents reported owning meme stocks, making it the third least popular type of stock out of the 11 options offered in our survey. 

However, for Gen Z, meme stocks were the fifth least popular stock -- 39% of Gen Z said they owned meme stocks compared to 28% of millennials. Gen Z investors were almost as likely to own meme stocks as they were small-cap stocks.

Male respondents were also more likely to own meme stocks and SPACs than female respondents. 

37% of millennials own blue chip stocks compared to 29% of Gen Z

Blue chip stocks are those of well-known industry leaders with track records of success. 

Millennial investors were more likely than Gen Z investors to be invested in blue chip stocks and males were more likely than females to own them, as well.

Blue chip stocks can be thought of in contrast to SPACs, which offer investors little information about the companies they plan to acquire and take public, and meme stocks, which can be unpredictable and trade on momentum more than fundamentals.

40% of investors own information technology stocks and 38% hold high-tech or emerging tech stocks

Investors aged 18 to 40 showed interest in a range of sectors. Respondents were most likely to own stocks in the financial sector (42%), information technology (40%), high-tech/emerging technology (38%), healthcare (37%), and energy (36%). 

Generational and gender differences were apparent in the information technology sector -- 41% of millennials owned information technology stocks compared to just 29% of Gen Z, and 45% of males owned stock in that sector compared to 34% of females.

Which of the following sectors do you own stock in?

Sector

Gen Z

Millennial

Male

Female

All investors aged 18 to 40

Financial

42%

41%

43%

39%

42%

Information technology

29%

41%

45%

34%

40%

High-tech/emerging technology

35%

39%

40%

37%

38%

Healthcare

33%

38%

36%

39%

37%

Energy

31%

36%

36%

36%

36%

Real estate

35%

27%

31%

26%

28%

Industrial

30%

26%

26%

27%

27%

Utilities

27%

25%

28%

23%

26%

Communication

23%

25%

27%

22%

25%

Consumer staples

15%

22%

18%

24%

21%

Marijuana

20%

18%

19%

18%

18%

Consumer discretionary

14%

15%

15%

15%

15%

Other

6%

6%

5%

8%

6%

18% of young investors hold marijuana stocks

An optimistic case for the marijuana industry could be made with public opinion favoring marijuana legalization, some states legalizing cannabis, and a Democrat-controlled Congress and White House. 

Has that optimism translated into more interest in marijuana stocks among investors aged 18 to 40?

Our research suggests that interest in marijuana stocks relative to other sectors remains low among Gen Z and millennial investors. Just 18% of respondents said they owned marijuana stocks, making it the second least popular sector ahead of consumer discretionary stocks. 

There was notable overlap between investors that owned marijuana stocks and cryptocurrency. 65% of investors that held marijuana stocks also owned cryptocurrency. 

Holders of meme stocks were also more likely to own cryptocurrency relative to holders of other types of stocks. 51% of meme stock owners held cryptocurrency.

Social media buzz and influencers don't sway Gen Z and millennial investors as much as other sources

Although recent Motley Fool research found that 91% of investors in the 18 to 40 age range get investing information from social media, social media buzz and reviews from influencers were the two least important factors when determining whether to buy a stock.

This finding aligns with our previous research, which found that investors between 18 and 40 trust other sources of information more than social media platforms like TikTok, Twitter, and Reddit.

Please rank the importance of the following when determining whether or not you'll buy a stock. Rank them from 1 (most important) to 9 (least important).

 

Gen Z

Millennials

Male

Female

All investors aged 18 to 40

Historical stability 

5.49

4.17

4.71

3.91

4.32

Ratings from investment researchers

4.37

4.37

4.46

4.26

4.36

Dividends

4.4

4.37

4.56

4.22

4.39

Reviews from traditional investing sites

4.7

4.44

4.72

4.3

4.51

Market cap

4.91

4.78

4.88

4.87

4.87

P/E ratio

5.04

5.06

4.87

5.23

5.05

EPS

5.46

5.61

5.28

5.74

5.51

Reviews from influencers

5.77

6

5.68

6.27

5.97

Social media buzz

4.85

6.19

5.85

6.19

6.02

Historical stability, ratings from researchers, and reviews from traditional investing sites are the most important factors

Gen Z and millennials place the most weight on a stock's historical stability, ratings from investment researchers, whether the stock offers a dividend, and reviews from traditional investing websites. 

However, Gen Z reported social media buzz as their fourth most important factor, on average, and ranked it higher than historical stability. For millennials, social media buzz was the least relevant factor to consider when determining whether to buy a stock. 

Millennials tended to place more emphasis on traditional investing sites than Gen Z investors, while members of Gen Z were more likely than millennials to rank reviews from influencers as an important decision-making factor.

Male investors aged 18 to 40 were more likely than female investors in the same age group to value historical stability, while female investors placed more emphasis on social media factors.

Less important to Gen Z and millennials were more traditional measures of a stock: market cap, price to earnings (P/E) ratio, and earnings per share (EPS).

Gen Z and millennial investors mix new and old

Our results suggest that Gen Z and millennial investors are sticking with classic investing approaches and moving into new sectors and assets. 

For example, stocks and bonds are the most popular assets among Gen Z and millennials, but they're also more likely to hold cryptocurrency than they are to be invested in an index fund or mutual fund. 

Gen Z and millennial investors are more likely to own more typical types of stocks -- growth stocks, value stocks, and stocks that offer dividends -- rather than investing in emerging types of stocks like SPACs and meme stocks. Gen Z, however, has shown more interest in the latter two types of stocks than millennials, while the older generation is more likely to own blue chip stocks. 

When it comes to sectors, Gen Z and millennials are about as likely to own stocks in fast-growing sectors like information technology and high-tech/emerging technology as they are in financials and energy. 

And overall, Gen Z and millennials pay more attention to historical stability and ratings from investment researchers and traditional investment websites than social media buzz and influencers -- although Gen Z is bucking some of those trends. 

Methodology

The Motley Fool distributed this survey to 1,400 American adult stock investors via Pollfish on April 19, 2021.

Respondents were 49% female and 51% male.