Millennials are in the driver's seat when it comes to trading. And they're betting big on a handful of favorite S&P 500 stocks.
Tesla, Apple and Amazon.com continue to be the top holdings of millennial investors and all are up in value this year, says an Investor's Business Daily analysis of data from the just-released Apex Next Investor Outlook for the fourth quarter and S&P Global Market Intelligence.
Watching millennials' portfolios is important. As these investors age and start families, their generation is turning into a driving force of trading.
"Over the past few years, aggregate assets for all generations have risen 16% to $52.4 trillion, while millennials and Gen Z are gaining wealth at a rate of 25%, much faster than the older generations," the report says. "Such a massive shift in market power is fueling major implications for how, when, and why financial services are consumed today and in the future."
Watching Millennial Money
Millennials, aged 26 to 41, triggered nearly 56 million trades in the fourth quarter. That's more than any other generation, Apex says. And it's nearly 1.5 times the trades made by Gen X, aged from 42 to 57. Gen Z, aged 25 and younger, made the fewest moves overall, executing just over 9 million trades.
And amazingly given the S&P 500's volatility, much of the transactions are buying or holding stocks — not panic selling. "A large minority of their positions had no sales and were increased with additional buying activity," Apex said.
Interestingly, investors of all generations are holding on to stocks, even following the S&P 500's big drop last year. Four out of five accounts across all generations had no trades at all in the fourth quarter. Eighty percent of millennials' accounts made no trades in the fourth quarter. And that's consistent with other generations.
But trading was happening. But it was mostly buying. Additionally, 40% of millennials' accounts only had buy transactions. That's actually slightly less than the 43% of Baby Boomer and Gen X accounts that only had buy transactions.
And all generations, including millennials, maintained 88% hold rates of stocks. But what are they holding (or buying)?
Tesla Is Still No. 1 With Millennials
Tesla holds a special place in millennials' hearts. It continues to be the generation's top holding — although other generations have tilted more toward Apple.
And that's paid off nicely for millennials. Shares of Tesla have gained nearly 65% this year, following a powerful bounce in the shares after last year's crash. Shares are still down nearly 21% in the past 12 months. "TSLA is still a beloved stock, especially with millennials and Gen Z, who chose to hold their position at the highest rates, even as the price plummeted," Apex's report said.
Additionally, Tesla is found in 93% of portfolios of self-directed investors including millennials, versus just 84% of investors who use managed brokerage services.
Apple And Amazon Still Big Favorites With Millennials
Apple and Amazon round out millennials' top three favorite stocks. Both are beating the market, too.
Apple is the No. 2 position, and it's up 14% this year. Most generations boosted their exposure to the blue chip electronic gadget maker. Millennials, for instance, took their hold rate in Apple up 1.1% to 12.4%.
Amazon, too, is an S&P 500 stock millennials seem to be patient with. Yes, the stock has lost roughly a third of its value in 12 months' time. But it's still up 13.4% this year. Investors are waiting for the online shopping giant's cost cutting to pay off with a return to profitability. The company is seen making $1.51 a share in 2023, up from a loss of 27 cents a share in 2022.
Millennials also added a few new stocks. Meta Materials, a maker of nanocomposites, jumped to be millennials' No. 69 stock, up from not even being in the top 100 in the third quarter. And AGNC Investment, a mortgage real estate company, vaulted to be millennials' No. 76 most popular stock, up from unranked.
Millennials may not always be right. But given their outsize weight in the S&P 500, they make lots of noise.
Top Millennial Holdings
Most are enjoying big jumps in value this year
| Popularity rank | Company | Symbol | 1-Year % Ch. | % YTD | Sector |
|---|---|---|---|---|---|
| 1 | Tesla | -20.4% | 64.5% | Consumer Discretionary | |
| 2 | Apple | -6.5% | 15.2% | Information Technology | |
| 3 | Amazon.com | -33.7% | 14.3% | Consumer Discretionary | |
| 4 | Microsoft | -9.0% | 6.3% | Information Technology | |
| 5 | Nvidia | 6.1% | 62.5% | Information Technology | |
| 6 | Alphabet | -28.5% | 2.9% | Communication Services | |
| 8 | Meta Platforms | -12.8% | 43.8% | Communication Services | |
| 9 | Berkshire Hathaway | -2.2% | -1.8% | Financials | |
| 10 | Advanced Micro Devices | -26.8% | 24.0% | Information Technology | |
| 11 | AMC Entertainment Holdings | -60.4% | 53.0% | Communication Services |
Sources: IBD, S&P Global Market Intelligence, Apex Trading
Follow Matt Krantz on Twitter @mattkrantz
