Teenagers have mixed feelings about the stock market after GameStop‘s trading frenzy, according to a survey from nonprofit youth organization Junior Achievement USA and tax, accounting and consulting firm RSM examining their beliefs about investing.
Following GameStop’s rises and falls, 39% of teens see the stock market as an opportunity to “make money quickly,” while 20% believe it’s “too risky.” However, 40% still think stocks are a “good long-term investment,” the survey revealed.
While the GameStop saga captured teens’ attention, the events may have turned away some future investors, responses show. Only half of teens believe the stock market is “a good thing” for everyday Americans, responses show.
Moreover, 37% of teens wouldn’t invest if given money to participate in the stock market, according to the survey.
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“A percentage of teens have been basically sidelined because of this,” said Ed Grocholski, senior vice president of brand for Junior Achievement USA.
“It’s understandable why they would be hesitant to put money into the stock market,” said certified financial planner Leona Edwards, wealth advisor at Mariner Wealth Advisors in Nashville. “But it could put a serious dent in how much they are able to save in the future.”
Their reluctance to invest may affect putting money into their first workplace 401(k) plan, Grocholski said.
“We all know that if you’re going to invest for retirement, you need to start early,” he said. “What we’re seeing here for a good portion of teens is that’s not going to be the case.”
Although the survey showed teens’ hesitancy about the stock market, there were also signs of interest.
If given the funds to participate, most teens would choose to invest, with 43% preferring the stock market, 25% opting for cryptocurrency and 24% sinking money into real estate.
“A lot of these teens are already thinking about different ways to invest other than the stock market,” Edwards said. “And diversifying is a really good thing.”
The survey also revealed where teens learn about the stock market, with 43% relying on social media. Other young investors turned to parents (35%), websites (30%) and schools (29%).
“We all know that [social media] is not an unbiased source of information,” Grocholski said. “So what they got exposed to was the worst-case and best-case scenarios.”
These findings align with the responses to a new CNBC/Momentive Invest in You survey. Some 35% of 18-to-34-year-olds turn to social media to research investment ideas, according to the report.
“I’m not against it because there are a lot of knowledgeable people on social media,” Edwards said. “But investors need to do their research and figure out if the people they’re getting advice from are worthy of their consideration.”
This survey polled 1,004 13- to 17-year-olds through market research firm Engine Insights from July 15 to 20.