Millennials are the first generation to be raised with the internet and a constantly growing selection of gadgets and tools readily available 24/7.
Due to that, millennials have a unique relationship to everything from tech-investments to cryptocurrencies and their preferred investment methods differ quite a lot from previous generations.
At the same time, millennials have also lived through several major recessions and complete market meltdowns, which, in turn, has made them more cautious and aware of risk than their parents.
Because of that, we decided to take a look at some of the best investment ideas and trading concepts for millennials, and we’ve collected three of the best tips in the following article.
3 Investment Tips For Millennials From Experienced Traders
1. Don’t Forget To Diversify
One of the issues with millennials being more risk-averse than their parents is that many of them miss out on opportunities. While it’s always good to be aware of the risk and try to avoid unnecessarily risky investments, it’s equally as important to diversify one’s portfolio.
The reason being that diversification, when done right, provides an opportunity to, if not completely avoid, at least minimize risk.
Therefore, stock investors should look for opportunities outside of the markets they’re used to. For example, if you’ve only invested in American stocks, see if you can find valuable investments on the European stock markets. Or take it one step further and try to find commodities – whether it be futures or spots – ETFs or mutual funds to invest in.
2. Try Online Trading
This tip goes hand in hand with diversification, although it should be done even more carefully.
You see, another great way to diversify your portfolio is trading. Today, there is a large selection of great online brokers that allow you to trade forex as well as speculate on a range of underlying assets. Now, trading is associated with increased risk, but with increased risk comes an increased potential to make a profit. Here you can find the best forex broker.
Trading is also a great way to improve your analytical skills since you’ll have to find value in the markets more often than with long-term investing.
3. Automatic Investment Solutions
Thanks to the recent technological advances, it is easier than ever before to set up automatic investments that require little to no maintenances.
There is a number of apps and software that are easy to use and that automatically invests small amounts of money on a regular basis, without you having to lift a finger.
For example, Acorn is an app that connects to your debit or credit card and that invests spare change from every purchase you make with that said card in a portfolio of low-risk ETFs.
Clink is another app that works in a similar way, although it gives you more control of how much and when you want to invest. You can, for example, set up the app to invest a dollar a day in a selection of ETFs that have been handpicked by a team of professional investors.
Naturally, you shouldn’t expect to get rich overnight with apps like these, but in the long run, small and consistent investments can be life-changing.
Millennials have more investment and trading opportunities than any previous generations. However, due to an increased risk-awareness, millennials are also investing less than the generations before them.
Therefore, we invite all millennials to make use of all the technology that’s available at our fingertips to diversify and improve their portfolios and investment strategies.
Lastly, don’t forget that the internet is the biggest resource of free and low-cost financial advice and investment tips that can help you maximize your efforts while also lowering the potential risk.