For years, Wall Street and investing has been controlled by large institutional investors and politicians. Nowadays, things are slowly changing, with the advent of investing platforms such as Invstr who democratize investing, normal people can become their own investors.
Brokers are becoming more and more obsolete, and people are taking the reins of their financial future. One of the largest demographics taking advantage of this, is Gen-Z: any person between the ages of 6 and 24 as of this writing. As of now, Gen-Z is at most only 2 years out of college and starting to enter the workforce.
Gen Z’s formative years bridge the gap between the Great Recession and the coronavirus pandemic. The pandemic served as a gateway into the investing world for many. Public internet forums such as “r/wallstreetbets” on reddit have become favorites for Gen-Z as it serves as a place in which investors not only discuss investment but memes and a plethora of other unrelated topics. The size of this platform has been increasing rapidly. As a member of Gen-Z as well as someone who has visited the forum, I find there to be a herd like mentality among investors.
This mentality did some damage recently, as Wallstreet played an integral role in the stock surge of GameStop, a stock that many investors predicted would fade out as e-commerce took over. One of the firms on wall street shorting GameStop, Melvin Capital, made their opinion on GameStop public. In response to this Wallstreet bets forced the stock upward as a direct response to Melvin capital, some intending to force Melvin to cover their short and stem their losses. This would of course boost the stock higher and appease a trollish desire, the investor psychology behind this is quite interesting. In fact, many of the investors on these forums pridefully refer to themselves, “degenerates.”
Whether or not you’re a fan, Gen-Z is taking an interesting approach to investing and analyzing the qualitative side of what is going on may be helpful.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.