CommSec, the Commonwealth Bank’s stockbroking arm, says 50 per cent of their new customers are millennials trading on the markets because they missed out on housing.
The trading arm says the number of 35+ traders has gone up 51 per cent in the past five years, and now represents 28 per cent of their clients. Even 18-24 year olds are up 10 per cent to 20 per cent.
And it’s all because bricks and mortar, that stock way of building wealth, is now either out of reach or like it may not return the dividends it once did.
Some are building up enough for a home deposit, says a report in the Sydney Morning Herald.
Really Simple Money asked the experts what stocks Gen Y investors are treading in. Apparently, it’s a mixture of tech, food and services. Big names, and new kids on the block.
Blue-chip shares can earn you a four to five per cent return but millennials are comfortable with a higher level of risk and are willing to put their money behind growth stocks.
There are some big numbers here and it’s tempting to think you could make a very good return relatively easily. But read our tips for buying shares before you do anything – and reallysimplemoney.com.au is not a stock picker, nor do we give financial advice. You pay your money and take your choice.
Jace Armstrong of Commonwealth Bank Corporate Affairs provided these suggestions.
Ten stocks to watch for millennial newbies
Close to home:
1) Xero – this New Zealand-based company has developed cloud-based accounting software for over a million small businesses to rival the more established players like Sage and MYOB. It is expected to reach $1 billion revenue in five years.
2) A2M – A2M supplies and commercialises milk and infant formula products which are particularly suitable for the lactose-intolerant. The Chinese market for infant formula has increased by 300% in the last year. With the rise of the Chinese middle class, this is only the tip of the iceberg.
3) Carsales – Carsales is Australia’s largest automotive, motorcycle and marine classifieds portal. It also has parallel businesses in data research, finance, vehicle inspections and tyre sales. While Australians are buying more cars and the business is set to grow, some say the stock is currently overvalued.
4) Bellamy’s – Tasmanian company Bellamy’s offers a range of organic food and formula products for babies and toddlers. The stock price fell 75% in early 2017 and is rebounding. This could be a chance to buy bargain shares in a profitable company but do your homework.
5) Altium – One of Australia’s largest software companies, providing software for electrical engineers designing printed circuit boards (PCBs). Since PCBs are used in just about every electronic device you can think of, Altium’s business can only expand. This is a long-term play.
International big names:
6) Apple – Even with near-fatal drops in price in the past, Apple has reinvented itself and stocks have grown 30% over 15 years. The iPhone represents two-thirds of the Apple business. Apple’s future includes the iPhone 8 as well as Apple’s services business, content and licensing.
7) Google – Google is now the dominant search engine everywhere except China. At its core, it’s an advertising business and global digital ad spend is set to grow at least 50% by 2020. Google is also working to increase internet access globally and invest in next-generation tech innovations.
8) Facebook – Facebook now has over 1.9 billion users. While stock for this social network company can fall by as much as 3% in one day, it is still up 30% in 2017. It is now one of the largest publicly traded companies in the world. Earnings per share are expected to rise over 25% per year for the next five years.
9) Amazon – This e-commerce and cloud computing company has been a household name for some time. Its planned expansion into the grocery sector is making large supermarkets very nervous. The “Death by Amazon” index now runs to 30 retailers.
10) AMD – Advanced Micro Devices is a semiconductor company that develops CPUs (Central Processing Units) and GPUs (Graphics Processing Units). It is second only to Intel in market share. The announcement of a new product line has created market excitement and shares have grown by 50% in 2017 but this is still a risky investment.