Editor’s note; this article appeared in the January/February 2019 edition of the Michigan Cannabis Industries Report.
Millennial Money in the Stock Market
Three millennials describe their best investments
by Ken Harrell
One of the tried and true sayings on Wall Street is, “The trend is your friend.” I believe that it is critical to enter into a new year with a clear concept of the power of trends. In addition, it is important to have a certain level of awareness about the variety of trends that can be beneficial to follow. As a new investor, you can focus on pricing trends using simple moving averages. You can look at a stock’s average trading volume. Some investors like to pay close attention to quarterly revenue growth and increases in company earnings. At the end of the day, the more data available to analyze the better.
No matter how many numbers you crunch, there is no trend more important than market sentiment. According to Investopedia, “Market sentiment is the overall attitude of investors toward a particular security or financial market. Market sentiment is the feeling or tone of a market, or its crowd psychology, as revealed through the activity and price movement of the securities traded in that market.” In plain English, market sentiment is a trend which tracks investors’ emotions about that market.
As more than 60 million baby boomers get older and take more of their money out of the stock market, it is vital to identify the trends of the new money entering the market. In this article, I interviewed 3 millenials and documented their individual sentiment on stocks and the real estate market. Their unique and intelligent responses helped me to get a better grasp as to what I can potentially expect as an investor in 2019.
Our 3 millennials are:
Ashton Howard, 28 from Detroit, MI. She has been investing for more than 1 year. She thinks that $250 – $500 is a good amount to start. She desires a 40% – 50% gain on her money within 1 year. Her top 5 picks for 2019 are: Amazon (AMZN), Bitcoin (BTC), Ulta Beauty (ULTA), Coca-Cola (KO), and Netflix (NFLX).
Ben J. Levin, 25 from Ann Arbor, MI. He has been investing for more than 1 year. He thinks that any amount is a good amount to start. Just start. He desires a 15% – 25% gain on his money within 1 year. His top 5 picks for 2019 are: Alibaba (BABA), Amazon (AMZN), Tesla (TSLA), Walmart (WMT) and Facebook (FB).
Paris Dandridge, 25 from Detroit, MI. She has been investing for less than 1 year. She thinks that $1,500 is a good amount to start. She desires a 50% gain on her money within 1 year. Her top 5 picks for 2019 are: Facebook (FB), Netflix (NFLX), Apple (AAPL), Visa (V), and Disney (DIS).
As more than 60 million baby boomers get older and take more of their money out of the stock market, it is vital to identify the trends of the new money entering the market.
Some of the consistent responses included that they all consider the stock market to be a long term investment vehicle. Which is a realistic approach. In addition, they all believe that real estate is a solid investment opportunity. “I think people should invest in rental property! Especially if you can afford them in popular areas where millennials and hipsters reside,” says Ashton. Paris adds, “Unlike a stock, real estate never becomes worth nothing, even if the value drops.”
When I asked our millennials about their sentiment towards investing in marijuana stocks, I got some very interesting responses. “Short-term, no. Long-term, yes. The real money seems to be in the industrial side of marijuana, rather than the recreational side,” says Ben. This could have some truth to it. There are a number of factors that influence the marijuana industry as a whole, especially the recreational use in the US.
Ashton adds, “I don’t think marijuana is a wise decision now. But if the investment is low, you can buy low and maybe once all the policies and kinks have been worked out it could be a good investment long term.”
This is a solid perspective. Always keep in mind, the bigger the risk, potentially bigger the reward. The time to invest in these types of stocks is now. Get in before all of the policies and kinks have been worked out to maximize your gains.
Paris shares her sentiment, “I would say yes. It’s a growing industry, which is always a good sign. I feel like if I get in now, I could make some real money off of it because I think these kinds of stocks are going to blow up because of the buzz it’s getting from it being legalized in Canada and different states in the US. Honestly, whether or not I choose to ingest any THC, I can’t deny the monumental investing opportunity that a potentially $75 billion industry represents!”
Experienced investors can be assured that millennials are starting to get active in the stock market. These new investors have aggressive goals and intelligent approaches towards the companies they choose to invest their money in. Based on my research, it is clear that millennials see the value of saving their money and investing in diverse vehicles; traditional stocks, ETFs, crypto currencies, real estate and yes marijuana stocks.
It is important to keep in mind that any investment can involve risk. No returns are guaranteed. And, the cannabis space has been quite risky over the years. It is critical that you do your homework and necessary due diligence prior to speculating with your money.
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Ken “Blanks” Harrell, Stock Market Strategist
Bullish Institute of Financial Literacy, LLC
BullishInstitute.com – 313.744.3489