Digital natives investing in their comfort zone
MILLENNIALS are lining up to invest in overseas companies, discouraged by high property prices, research has found.
Data from global investing platform Stake revealed 56.6 per cent of users are aged 18 to 35. Of these, 75 per cent are investing in overseas shares for the first time and 44 per cent are doing so because Australian property is too expensive.
A whopping 85 per cent wanted to invest in technology, and 78 per cent in emerging industries. Meanwhile, 62 per cent said Australian markets do not offer enough diversity.
Stake founder and CEO Matt Leibowitz claims the Australian market is boring for people under 50, who want to buy into what they understand.
“You talk on an Apple phone, you’ve got Mastercard or Visa in your pocket, Netflix at home and you use Google every day,” Mr Leibowitz said. “Australians are finally able to invest in what they’re interested in.”
Popular companies for those aged 18 to 35 have been Tesla, Facebook, Amazon, Apple, Nvidia, Paypal, Netflix, Microsoft, Alibaba and Dropbox.
Stake.com.au launched in 2017 and seeks to provide direct access to US stocks, without the traditionally exorbitant fees.
“There has been a growth in international investing, but through managed funds,” Mr Leibowitz said. “People want to go direct these days and we wanted to build the platform.”
Young investor Joe Harris, 22, has been using Stake for several months, four years after making his first investment. He was initially interested in some cryptocurrencies.
“I did well in that until my grandparents asked me about it and I thought I’d better take my money out,” he said.
The software engineer, who works for Atlassian, wanted to invest in the US to get a slice of his favourite companies.
“I’m really into tech on the NASDAQ, I’m a big Elon Musk fan,” he said. “Property is pretty much out of reach for all of us.”
Mr Harris said young people related more to modern startups and tech firms than traditional local investments.
“If you asked someone my age to name five listed tech companies, any of us could do it,” he said. “But ask us to name five mining companies with a market cap over $1 billion and we’d have no chance … nonadvanced investors are going to reach for the things they feel comfortable with.”
Sam Brown, founder of Australian Fintech Pelikin, has also noticed young investors losing interest in housing.
“Gen Y are more interested in putting money towards travel and experiences,” he said.
Meanwhile, data from global foreign exchange provider WorldFirst found more than $39 million was paid from Australian customers in international transfers for personal investments in 2016 and 2017; up 16 per cent.