How different generations approach investing and trading

Everyone’s approach to trading and investing is different, for all kinds of reasons. For many people, the generation they belong to will have an influence on their priorities when it comes to managing their money, their saving goals, the type of media they consume, and other factors that might influence the way they invest or trade. 

At Alpari, we have researched some of the key differences between members of different generations that might affect their financial decision making. We also looked into what people today have in common across the generations in terms of trading and investing habits. 

The generations

Baby Boomers (born in 1946-1964):

Investment Focus: This generation’s focus is predominantly on capital preservation, retirement income, as well as traditional assets such as stocks, bonds, mutual funds, and real estate. Many Baby Boomers are also beginning systematic withdrawals as they transition fully into retirement. A systematic withdrawal plan is a strategy where an investor regularly withdraws a set amount from their investment to provide steady income. These withdrawals typically come from a mix of interest, dividends, and principal.

Risk Tolerance: Baby Boomers are understood to be more risk-averse in their investing and trading, emphasizing income and stability – this generation are cautious about losses, as they often rely on their investments for their income in retirement. They know that they don’t have as long to wait for their capital to bounce back as a younger person does, if their investments are affected by volatility.

Information Sources: Members of this generation tend to get their information from financial advisors, traditional news media, and established financial institutions.

Alpari can cater to this generation’s need for stable investments and reliable platforms. They might feel drawn to traditional assets like gold and oil, which can be traded on Alpari as CFDs, speculating on whether the price will rise or fall. Baby Boomers who are looking for relative stability in their investments might also opt for a PAMM account, which allows traders to copy the strategies of successful traders without having to actively trade. 

Generation X (born in 1965-1980):

Investment Focus: Gen X are now between 45 and 60, which affects their investment and trading priorities. While older members of Generation X might be starting to think about retirement readiness, this generation are also prioritising wealth accumulation, inheritance management, and balancing family needs with future financial security. Many members of this generation will have dependent children who they are factoring into their financial plans, in many cases putting aside money for their children’s further education.

Risk Tolerance: This generation has a moderate level of risk tolerance, balancing growth with security and income.

Information Sources: Generation X rely on a mix of traditional advisors, financial media and independent analysis. They are more likely than Baby Boomers to also incorporate their own online research into their decision making. 

This generation who have a higher risk tolerance than Baby Boomers might benefit from Alpari’s tools for balancing growth and risk, as well as help diversifying their trading and investment portfolios. Gen X traders who would like to develop their understanding of different trading strategies might benefit from trying the Alpari demo account – it offers a way to test out strategies and learn about the movement of different assets, in a risk-free environment. 

Millennials (born in 1981-1996):

Investment Focus: Millennials are highly engaged in financial goal-setting. Their investment goals include early retirement and long-term wealth building. When it comes to the type of assets they are most interested in, tech stocks are very popular with Millennials, as is cryptocurrency, which many members of this generation will have watched the growth of since its emergence in 2009 with the invention of Bitcoin. ESG (Environmental, Social, and Governance) investing is another focus for this generation.

Risk Tolerance: Millennials are open to calculated risk-taking. They are comfortable with volatility and are becoming more engaged with risk management, though levels of sophistication vary widely.

Information Sources: They get their information and inspiration from financial apps, social media, online education, peer communities, and financial advisors. This generation is generally much more comfortable researching and learning online than its predecessors. They prefer platforms that integrate multiple data sources.

Alpari offers access to a range of diverse assets (including crypto which is very popular with this generation). Our user-friendly platforms and educational resources are also ideal for meeting this generation’s needs. Alpari regularly posts up to date market analysis to help keep readers up to date, an excellent resource for Millennial traders who do much of their research online. 

Generation Z (born in 1997-2012):

Investment Focus: Many members of Generation Z, now aged between 13 and 28, are entering investing earlier, often around age 19 – though this trend also began in older generations and varies by region and education. This generation is interested in assets like cryptocurrency, ESG investments, and alternative assets like options. Fractional shares have also become more accessible in recent years, and are popular among Gen Z investors who might be earlier in their career and able to invest a smaller amount for now.

Risk Tolerance: This generation has a high risk tolerance, but this often comes with limited financial confidence. They are prone to investing in speculative assets hoping for fast returns, but they are increasingly aware of the need for financial literacy. Their higher risk tolerance might also be related to the fact that they know they are young and have longer to get to know the markets.

Information Sources: Gen Z are highly influenced by online sources, including social media (TikTok, YouTube), influencers, peer networks, financial apps, and gamified trading platforms. While this means they are well-connected to learn from each other, and are using apps that can help them develop their knowledge, they are at risk of misinformation from social media. 

Alpari’s user-friendly mobile app is a great introduction and our educational content can combat misinformation – we emphasise responsible trading. The app has helpful features like tailored recommendations, helping users discover their next trade with suggestions based on their recent activity. You can seamlessly move from viewing the latest trade signals to placing a live trade, all within the Alpari app. 

How will Generation A (born 2010-2024) invest and trade?

It has been predicted that Generation Alpha might see deeper income inequality around the world. Some may argue that this generation may grow up with strong financial literacy and greater access to digital financial tools, though their wealth outcomes will depend on broader economic factors like inequality, education, and inflation. 

According to a Mastercard study in the APAC region, many children born after 2010 have access to financial tools, often through custodial or shared accounts. For example, 94% reportedly have a financial account, and some are already engaging in investing with parental oversight. 

As digital literacy and early exposure to financial tools grow, this generation may potentially be quicker to explore complex assets like options in adulthood. 

Common threads and bridging the gap

Despite generational differences, there are some universal goals: wealth building, financial stability, and preparing for financial independence.

Another common thread is the growth of digital platforms, which are being adopted by an increasing number of investors and traders, although seamless mobile platforms are especially critical for Millennials and Gen Z. 

There is strong, growing demand for financial education across all age groups, though Gen Z in particular seeks guidance to build confidence and long-term planning skills. Gen X’s desire for learning might focus on planning for retirement and how to manage inherited capital. 

Conclusion

Each generation brings their own unique investing styles and priorities — from Baby Boomers’ capital preservation to Gen Z’s digital-native, high-risk experimentation. However, all share a desire for accessible, trusted, and empowering financial solutions. 

At Alpari, we combine an easy-to-use, secure platform with educational resources including a Practice demo account where you can try out trading without using real money, to develop a confident understanding of the market. We have a large range of 750+ instruments available to trade across Forex, commodities, metals, indices, stocks, and cryptocurrency, to match any trader’s risk tolerance. Explore our trading accounts today.