Why Millennials & Gen Z Are Embracing Alternative Investments Today!
BartekSzewczyk / Getty Images/iStockphoto
Our Promise to You
Our editorial team is on a mission to deliver the most accurate and impartial reviews and insights. With data-driven strategies, we assess financial products and services, ensuring that our reviews remain untouched by the influence of advertisers. Discover more about our editorial standards and our review process.
20 Years
Empowering You to Thrive Financially
Expert Insights
From Industry Leaders
Trusted by
Millions of Savvy Readers
As millennials and Gen Z step into pivotal life stages, the way they view investments is evolving. While older generations placed their bets on stocks, real estate, and bonds, younger folks are trailblazing a path towards alternative investments.
According to a recent study, a staggering 31% of younger investors’ portfolios are now filled with alternative investments, in stark contrast to a mere 6% for their older counterparts.
Let’s unpack the reasons behind this shift and explore the allure of alternative investments for the younger generation.
What Are Alternative Investments?
Alternative investments break the mold of traditional avenues like stocks and bonds. Younger investors are gravitating towards these options due to their potential for greater returns, flexibility, and the chance to diversify.
According to Daniel Ray, an expert in investments, “Assets like cryptocurrencies, NFTs, and crowdfunding offer opportunities for rapid growth and the chance to support groundbreaking projects.”
Types of Alternative Investments
- Cryptocurrency: These high-stakes, decentralized currencies can yield incredible rewards.
- Real Estate: Investing in REITs or properties offers tangible growth prospects.
- Private Equity: Firms acquire businesses to enhance profitability and resale value.
- Collectibles: From art to vintage cars, these tangible assets can be resold for profit.
- Venture Capital: Funding startups with high growth potential in exchange for equity.
- Crowdfunding: Invest in companies by pooling resources with others for equity in return.
- Hedge Funds: Utilizing various strategies and investor funds to maximize returns.
- Precious Metals: Investing in valuable metals like gold and silver as a hedge against economic instability.
Why Are Gen Z and Millennials All About Alternative Investments?
Alternative investments are attracting younger generations for several compelling reasons.
Rethinking Tradition
Today’s millennials and Gen Z are questioning the effectiveness of traditional stocks and bonds. Many believe these conventional routes simply won’t deliver the returns they crave.
A significant percentage—over 70%—of investors aged 21 to 43 feel that average returns won’t be enough without diversifying into alternative assets.
Embracing Risk
Younger investors are more willing to take risks. They grew up in a fast-paced digital world, where adaptability is second nature and unconventional investments often yield the best results.
Investing with Purpose
For this generation, investing transcends mere profit. It’s about making a statement and aligning values. They invest in companies whose missions resonate with them, moving beyond just numbers and spreadsheets.
Crafting Your Strategy with Alternative Investments
While alternative investments offer exciting opportunities, it’s crucial to tread carefully. They aren’t quick wins and come with risks that require attention.
Educate Yourself
Knowledge is your best defense. Understand what you’re putting your money into—doing your homework is essential for avoiding scams and bad decisions.
Diversify Wisely
Don’t overlook traditional investments—stocks and bonds still play a vital role. Balance your portfolio to minimize risk while exploring alternative options.
Ultimately, staying informed, blending traditional and alternative investments, and taking your time are keys to success for Gen Z and millennials as they navigate the investment landscape.
