Millennials are becoming an increasingly influential demographic in the world today. It therefore only stands to reason that a significant portion of this generation is looking to become involved within the world of investing. However, we should first highlight the fact that approximately 75 per cent of all millennials are saving towards a retirement package.
This is quite interesting, for analysts have also found that the average individual is much more averse to the financial risks associated with open-market trading methods. Let us look at a handful of alternatives to traditional stocks and shares.
Research has shown that the average investor tends to underperform in today’s marketplace; primarily due to failing to be at the right place at the right time. Millennials may simply not have the temporal ability to monitor stocks within a real-time environment. As a result, opportunities can be lost before they are ever realised.
Index-based investments can circumvent this issue. These vehicles are more stable opportunities and are generally associated with a much lower overhead cost when compared to blue-chip holdings such as Microsoft or Apple. Furthermore, this form of passive investing is based off of predominant market values as opposed to the performance of an individual share. The end result is that they are frequently less volatile.
Spread betting is another healthy option to consider. One major benefit of this method is that profits can be made even during bearish conditions (times when the value of a market or a share may be falling). Thus, spread bets are relatively independent of predominant conditions. All that the trader needs to do is to correctly predict the movement of an asset within a predetermined time frame. We should also mention that one of the advantages of spread betting involves tax concerns.
Traders will not have to pay a stamp duty and the majority are not subject to any capital gains tax. This arises from the fact that the trader is not directly purchasing the asset in question.
Some millennials are more interested in turning short-term profits. This can often be difficult to accomplish when becoming involved with standard shares. It is therefore worthwhile to consider a position within the currency trading markets.
Forex trading can take place 24 hours a day and seven days a week; accommodating even the busiest of schedules. Furthermore, many positions can be opened and closed within a matter of minutes if desired. Some major currencies include the United States dollar, the British pound, the euro, the yen and the Swiss franc.
The Electronic Edge
It can be argued that the single most impressive advantage that the millennial investor can leverage is the ability to access professional online trading portals in seconds. These virtual brokerage houses are equipped with modern technical tools alongside a host of informative how-to guides for those who may be new to the industry.
Millennials have been known to think outside of the proverbial box. These alternative investment strategies can prove to be quite worthwhile from both short- and long-term points of view.