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Only a fraction of stocks are owned by millennial investors, compared to the older generations.
Young investors are still in their prime earning years, and they have high management costs.
Analysts said that Gen X and Baby Boomers are "the big fish" despite the fact that retail trading is real.
Young retail traders made headlines by entering financial markets during the COVID-19 pandemic. However, they still only own a small number of stocks.
According to Federal Reserve data, about 2.5% of stock ownership is held by millennials (age 25-40), which equates to approximately $1 trillion.
Although "trillion" may sound overwhelming, consider this: The Baby Boomers hold 55% of stocks representing holdings worth $22 Trillion; Gen Xers have 26% or $10.5 Trillion.
The Fed didn't track Gen-Z stock ownership, probably because it was a "drop-in-the-bucket," Jack Caporal, Motley Fool analyst.
Caporal stated that "the older generations, those who have had more time to accumulate wealth and let their investments grow, are kind of the big fish despite the retail trading revolution being real."
Young retail traders are still making a mark in the financial markets. They have driven record gains in once-cheap equities like AMC and GameStop, creating a new asset category called meme stocks.
The meme-stock mania and its daily volatility may have been caused by a revolution in retail access via trading apps. Caporal stated that the data shows that most Millennials will be investing long-term.
Caporal stated that Millennials have been steadily increasing their stock ownership since before the pandemic. He also noted that the cohort had about 1.8% of stocks in the early 2019 year. "And that tells me that Millennials are holding and buying stocks, and not trying to day trade.
Caporal stated that Millennials might not be able to invest in stocks because of the high price of equities and rising home prices despite slower wage growth.
He said that even though Millennials are entering their 40s, and reaching their peak earning years, stock ownership will likely increase.
