Navigating uncertainty: Australian young adult investors and digital finance cultures
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Navigating uncertainty: Australian young adult investors and digital finance cultures August 2021 Natalie Ann Hendry, Benjamin Hanckel and Angel Zhong RMIT University and Western Sydney University
This research was supported by RMIT’s
Enabling Capability Platform for
Design and Creative Practice, the RMIT
Vice‑Chancellor’s Research Fellowship
program, and WSU Vice‑Chancellor's
Research Fellowship program. Sincere thanks
to Renée Carmody for design support.
Dr Natalie Ann Hendry is Vice Chancellor’s
Postdoctoral Research Fellow in the School of
Media and Communication at RMIT University.
Her work explores the relationships between
health, media and education and how media
cultures influence communities and groups.
Dr Benjamin Hanckel is Senior Research
Fellow at the Institute for Culture and Society
(ICS) and the Young and Resilient Research
Centre (Y&R) at Western Sydney University.
His work examines the design and use of
digital technologies for health and wellbeing,
particularly as they are used by young people
and those who experience marginalisation.
Dr Angel Zhong is Senior Lecturer in Finance
from the School of Economics, Finance and
Marketing, College of Business and Law,
RMIT University. Her research interests
include investor behaviour, asset pricing and
investment.
To cite: Hendry, N.A., Hanckel, B. & Zhong,
A. (2021). Navigating uncertainty: Australian
young adult investors and digital finance
cultures – August 2021. Melbourne and
Sydney: RMIT University and Western Sydney
University. DOI: 10.25916/zbje‑qn11
Acknowledgement of Country
RMIT University and Western Sydney University
acknowledge the Wurundjeri, Darug, Eora,
and Dharawal (also referred to as Tharawal)
peoples as the traditional owners of the lands
on which the universities stand. RMIT University
and Western Sydney University respectfully
recognise Elders both past and present. We also
acknowledge the traditional custodians of lands
across Australia where we conduct business,
their Elders, Ancestors, cultures and heritage.
Navigating uncertainty: Australian young adult
2
investors and digital finance cultures — August 2021Research summary
What is happening for young What did we do?
adult investors? In April and May 2021, we undertook five
Over the last 12 months, during the initial focus group discussions with 21 young
wave of the coronavirus pandemic, 435,000 adults, aged 19 to 30 years to examine:
Australians first began to trade on the
± How and why do young adults in
Australian stock market, bringing the total
Australia invest in the stock market?
number of active retail investors in Australia
to a record high 1.25 million.1 The Australian
± How do young adults understand risk in
Securities Exchange (ASX) identified that "next
the context of investing and finance?
generation investors," aged 18 to 24 years, and
women are the fastest growing demographic ± How do young adult investors learn
groups of new retail investors. 2 This growth about finance and investing, and
in young investors has been attributed to the how do social media, digital trading
impacts of the COVID‑19 pandemic; emerging platforms and other technologies
and developing fintech products and platforms; influence learning about investing?
increasing circulation of finance content
on social media; increasing job market and
financial insecurity for young adults; and the
perceived unaffordability of Australia’s property
market. Although these factors influence
young adults differently, together they paint
a picture of the complexity and uncertainty
that many young Australians face in 2021.
As investing becomes more accessible for
younger investors through emerging digital
products and services, industry groups and
regulation bodies are concerned about
increasing numbers of inexperienced young
adults starting to invest. 3 Responses to
these concerns have focused on media
regulation and better financial education to
address financial literacy gaps and reduce
harm from financial losses. However, these
interventions may be misdirected or inadequate
without understanding the experiences
and needs of young adult investors.
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021What did we find? Where to next?
1. Young adults understand that ± Future interventions that aim to
investing on the stock market improve young adults’ financial
comes with risk. They mitigate education must account for the social
investing‑related risks by adopting contexts that position investing as
different strategies aligned to the only accessible way for young
longer‑term financial goals that shift adults to build wealth for their futures
as their knowledge and experience and alleviate financial insecurity.
grows. They were reluctant to This work must also account for
align investing with gambling, young adults who are excluded from
especially as they were mostly investing due to limited resources.
engaged in long‑term investing.
± Regulating emerging platforms,
2. Young adults were focused on digital advertising, and financial
their financial independence and discussion on social media are
security for the future. Investing necessary actions to ensure investors
was made accessible by digital are educated, but regulation is only
trading platforms, but motivated by part of this work. Where education
aspirations towards home ownership, is proposed it must acknowledge
job flexibility, self‑sufficiency, and the different ways that young adults
retirement, as well as enhancing learn through participating in digital
wellbeing and avoiding stress. finance cultures, through formal
and informal learning practices.
3. Young adults learn about investing
and finance through their personal
± Future research needs to explore the
networks and by participating in
financial and investing practices and
digital finance cultures. This learning
behaviours of different sub‑groups
cannot be distilled to just acquiring
of young adults and their social
“advice”. Financial learning involves
contexts as well as how they use
practices across a spectrum: from
digital trading platforms and engage
formal (structured, goal‑oriented) to
with digital finance culture to
informal (unstructured, incidental)
better understand their needs.
learning, and is enabled by digital
media (e.g., social media platforms,
digital trading platforms, memes),
traditional media (e.g. books), and
interconnected online and offline
communication (e.g. friends,
family and relatable others).
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Contents
Research summary 3
Young adult investors in Australia 6
The changing landscape of investing 6
Young adults – Gen Z and
millennials – as new market participants 7
Digital finance cultures and
financial learning 8
Research methods 10
Insight 1: Taking on risk was about
taking on opportunities 12
Key insights 16
Insight 2: Sometimes investing was
gambling, for other people, but it
wasn’t a gamble for informed and
long‑term investors 17
Key insights 19
Insight 3: Financial futures and
current life stages shape young
investors actions 20
Key insights 24
Insight 4: Learning about investing
is more than just seeking “advice” 25
Key insights 31
Conclusions 32
Recommendations 33
Future research 34
References and notes 35
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Young adult investors in Australia
The changing landscape of investing
Much of the growth in investors and investing Emerging low‑cost digital trading platforms,
behaviour has been attributed to the challenges like SelfWealth, Superhero, Raiz and eToro,
and opportunities of the COVID‑19 pandemic, counter misconceptions that new investors
as well as the changing concerns facing young need significant capital to get started and have
adults related to their income and job security. allowed new investors immediate and simple
Around the world, the trading volume in share access to the stock market. Where these new
markets surged by 50% during COVID‑19.4 In low‑cost digital trading platforms have been
Australia alone, the volume of retail trading by previously studied, work has examined their
individual investors jumped more than 60% comparability to digital gambling platforms.8
over the lockdown period, compared to before While there is limited evidence exploring this
the pandemic. 5 The Australian Securities and relationship directly with investors using these
Investments Commission (ASIC) reporting platforms, the emerging evidence does support
during this time stressed the risks of trading a relationship between gambling and investing.9
in a volatile market and highlighted that while Other financial analysis research suggests that,
retail investors were trading more frequently, in general, gambling cultures may motivate
their short‑term trading and market timing investors. For example, during the pandemic
behaviours were often not proficient.6 investing worldwide surged in association
with working from home and in countries,
At the same time, the fintech sector in like Australia, that are more likely to be
Australia has grown rapidly.7 News and characterised by existing gambling cultures.10
industry media have suggested that growth
of this sector in Australia is due, in part, to low
tax on start‑ups, emerging mobile payment
capacities, and young adults’ strong digital
engagement with digital banking and other
finance and entertainment products.
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Young adults – Gen Z and
millennials – as new market
participants
Growing numbers of new and young investors For young adults there are important reasons
are investing in international markets. One for this growing interest in investing. Young
in six first‑time investors are under the age adults are transitioning into adulthood at a
of 2511 and of those who began trading in time of increasing uncertainty20 and face a
the last 12 months, 45% are women.12 Young range of intersecting economic, ecological,
adults’ changing behaviours and attitudes ideological and cultural crises. 21 These crises,
to investing have not gone unnoticed by the like the COVID‑19 pandemic, exacerbate
industry. Recent data from Commonwealth existing uncertainties and inequalities, and
Bank's share trading platform CommSec shows have implications for young adults’ health
the number of first‑time investors jumped and wellbeing. For many young adults, the
by 125% since the start of the pandemic, transition from study to work has changed
and the majority (83%) of these first timers over the past several decades. More young
were made up of Gen Z, millennials and adults are experiencing anxiety about job
Gen X.13 A consumer survey by investment security and precarious work conditions (e.g.,
management company, Vanguard Australia, increased contract or part‑time work), and the
found that high numbers of Millennial and Gen pandemic and public health measures have
Z respondents started investing during the only intensified these concerns. 22 At the same
pandemic, with a subsection of respondents time, many middle class young Australians
holding cryptocurrencies in their portfolios.14 now desire flexible work conditions and aspire
to a ‘good life,’ that is, greater agency and
These young investors have contributed to the choice in flexible employment. 23 Increased
rise in ETF trading. In June 2021, Australian job uncertainty, job precarity and aspirations
fund manager, Betashares, reported that for job flexibility, sit against a backdrop of
millennials – aged 24 to 40 years – accounted housing unaffordability in Australia. Although
for two thirds of new ETF investors in 2020.15 these concerns have always varied by social
Across the sector, industry reports and news class and other social markers, young adults
media have highlighted the rise of “self‑directed see buying a house as a critical part of their
investors,”16 who enjoy connecting via life course, but are increasingly delaying
investing‑focused social media communities this due to affordability and starting families
and are “young, cashed up, time rich.”17 Almost later in life. 24 These shifting generational
half of “next generation” (18 to 24 years) experiences sit against a backdrop of greater
investors (45%) were reported by the ASX choice for young adults about their futures.
to be planning to invest in exchange traded This creates more opportunities but also
funds (ETFs).18 For those who invested all their carries risk, and such choices are enabled and
spare cash during COVID‑19, ETFs were the constrained by access to economic capital.
second most popular choice, followed by
shares. The total value of exchange traded
products has risen 53% and the current
value of ETFs have surpassed $1 billion on
the ASX. Average monthly ETF transactions
have increased by more than 150%.19
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Digital finance cultures and
financial learning
Young investors are engaged with what The GameStop trading frenzy in early 2021
we call “digital finance cultures”. These demonstrates the power of young retail
cultures are produced through people’s investors on social media platforms. Retail
actions and the media and technology that investors have gathered on Reddit via the
enables them. This includes how young subreddit ‘r/WallStreetBets’ to buy GameStop
investors interact with content circulated stocks since 22 January 2021. This created
by social media platforms and other digital a large surge in GameStop’s share price of
media (e.g., digital newspapers), as well more than 700% to 27 January, as well as a
as the digital financial assets (e.g., digital few other ‘meme stocks’ such as AMC. The
currencies) and fintech developments (e.g., aim of this, as a post on Reddit suggested,
digital trading platforms, digital payment was to “bankrupt institutional investors for
systems, money management apps). dummies.” Tweets from Tesla CEO Elon Musk
further fuelled this trading frenzy, and Musk
has gone on to exert material influence on
cryptocurrency trading via his Twitter account
Digital finance cultures include the ways after the GameStop saga. Social media are
different groups of people understand not only critical spaces of engagement for
investing, how they talk and learn about their investors. They also have opened up new
shared interests through social media and conversations around digital currencies like
digital technologies, and how they engage cryptocurrencies as well as inspired discussion
about potential cryptocurrency ETFs to
with media to discover and sustain shared –
legitimise and capture this growing market. 27
but not singular – values, norms, behaviours
and ideas about finance and investing. Within the finance industry, unmoderated (or
unqualified) investment advice shared through
digital finance cultures has been classified as a
form of “social trading”. While earlier use of the
Digital finance cultures also teach young
phrase was directed to copy trading platforms,
investors – both explicitly and implicitly – how
such as eToro and IC Markets, where investors
to understand money and finance, including
automatically and simultaneously copy other
values, norms and behaviours associated with
traders, 28 the concept has expanded to now
finance and investing. For example, alongside
refer to social media advice, such as sharing
Reddit, Twitter, Facebook groups and other
information on Reddit, investment channels on
online forums, TikTok and Instagram have
YouTube, share trading groups on Facebook,
become emerging sites of informal, everyday
and finfluencers offering financial advice
education for general and specific financial
via TikTok. In the UK, the Financial Conduct
advice and education. On these platforms,
Authority reported that younger investors
finance‑focused social media “finfluencers,”25
were more likely to engage with higher risk
educational accounts, and everyday investors
investment products – encouraged by online
encourage young adults to take control of
advertising – with almost two thirds of these
their finances and make their money “work
investors identifying that significant loss would
for them”. The digital share trading platform
impact their current or future lifestyles. 29
Superhero recently asked their users – 75%
of whom are aged 25 to 45 years – how they
learn about investing and most identified
“online news” and “podcasts” as the most
common sources for financial education. 26
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021News media and industry responses to Learning through digital technologies and
these changes in investing in Australia, and social media is often informal and characterised
elsewhere, have called for more and better as generally unstructured (e.g., no set plan),
financial advice. In late 2020, for example, interest‑driven, and often incidental or part
ASIC was reported as being concerned about of someone’s everyday life. 32 Unlike formal
social and copy trading and warned Australian education, learning in this way rarely has
retail investors to be cautious about copy one discrete goal or objective and may align
trading offered by low‑cost trading platforms. 30 better with leisure or hobby pursuits where
Concern is directed at both the low‑cost, education is pleasurable or connects people
low‑entry point accessibility afforded by to others with similar interests or “affinity
emerging digital platforms and technologies networks” enabled by media and technology. 33
as well as the social media‑fuelled circulation While learning through social and digital
of ideas and actions between investors, media can incorporate formal learning too
some with limited expertise or experience. (e.g., e‑courses about how dividends work),
research suggests that there is no clear
Yet learning is complex. Learning is about divide between formal and informal learning;
acquiring knowledge but also involves learning enabled through social media and
participation. 31 For example, receiving financial digital technologies happens on a gradient or
advice is often framed as acquiring financial spectrum from formal to informal practices. 34
knowledge and information, but learning about
investing and finance involves more than that, As investing becomes more accessible for
including how people participate in investing younger investors through emerging digital
communities or platforms. These processes products and services and their engagement
of learning (both knowledge acquisition and with digital finance cultures, industry groups
learning participation) are contextual, tied and regulation bodies have become concerned
to relationships, and involve learners doing about increasing numbers of inexperienced
things. In this project, we explore how learning people starting to invest. 35 Responses to
happens through digital finance cultures. This these concerns have focused on media
shifts our research from assessing how accurate regulation and better financial education to
individual pieces of financial “advice” are and address financial literacy gaps and reduce
instead explores how young adult investors harm from financial losses. However, these
learn about investing as an on‑going practice. interventions may be misdirected or inadequate
without understanding the experiences and
needs of young adult investors and their
relationships to digital finance cultures.
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Research methods
Recruitment and screening Focus group discussions –
survey what can they tell us?
In April and May 2021, we invited Focus groups gather people with similar
young retail investors aged 18 to 30 characteristics to discuss collective or
years to participate in digital focus
shared experiences, attitudes or ideas.
group discussions. 36 Recruitment was
conducted via social media networks,
student and university email and Participants offer insights from their
newsletter lists, as well as general social own experiences and are also invited to
media groups (e.g. neighbourhood pages)
reflect on social patterns, respond to
and finance and/or investing‑focused
others’ experiences and opinions, and
groups or accounts. In total 204
eligible37 people expressed interest in reflect on their individual interpretations.
the project and completed an online
screening survey that asked them to
This method builds a ‘group picture’
provide their income level, how they
invest, how much of their income they and taps into a collective understanding
invest, and details about their other of a social or cultural phenomena
investments and their investing – and/ (e.g., young adults’ investing practices). 38
or gambling‑related activities.
Analysing focus group discussions
Focus group discussions
involves paying attention to what
In May 2021, we facilitated five two‑hour individual participants say as
online focus group discussions with 21 well as how shared ideas develop
participants. Focus group discussions
(or not) within a group.
followed a question guide that explored
participants’ experiences with investing
and how they made investment decisions. Focus group discussions provide
We recorded and transcribed the focus detail about context and explore
group discussions and then coded
nuance and complexity. This method
themes in Atlas.ti. Participant quotes in
assists researchers in interpreting
the report have been edited for brevity
and all names used are pseudonyms. quantitative analyses of the market
or large‑scale consumer surveys.
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Our participants
In total, 21 people participated, aged who were also studying) to over $130,000
between 19 to 30 years (average age of 25.8 (a full‑time employee not studying). On
years), and all used digital trading platforms. average, participants invested approximately
Two thirds of participants were Anglo 23% of their annual income, however their
or white Australians (66.6%; n= 14), four investment allocations were varied, ranging
were Malaysian and/or Chinese (including from just under 1% to 60% of their income.
Australian Chinese; 14.3%) and three were Seven participants (33.3%) were employed
South African or European (19.0%). in finance or finance‑related industries.
Just over half of all participants were studying
Just over half of our participants invested in or had just completed undergraduate or
cryptocurrencies (52.3%). Most men invested postgraduate courses (52.4%; n= 11), with five
in cryptocurrencies (58.3%; n= 7), as well as studying finance‑related degrees (23.8%).
four women (44.4%). Only two women and
one man held property investments (33.3%). We also note that as the project is a pilot
Across the sample, two men self‑reported study and we recruited through some
regularly engaging in gambling (e.g., via sports finance‑focused channels, our sample is not
betting apps, at the casino etc.; 16.6%). representative of young adults broadly, but
provides critical information about the ways
Participants’ approximate annual income varied young investors are currently investing.
from under $20,000 (two casual employees
Who participated in our project?
21 people joined in one of five focus All participants used digital trading platforms
group discussions. This included: and apps
± 9 women (all over 24 years of age; ± 16 use at least one new low‑cost,
42.9%), 12 men (57.1%) non‑bank trading platform like
SelfWealth or Superhero (76.2%)
± 8 were aged 19 to 24 years (38.1%),
13 were aged 25 to 30 years (61.9%) ± 16 use at least one bank’s trading
platform like CommSec or ANZ
± One third of participants were “new” Share Investing (76.2%)
investors (19 to 28 years) with less than
18 months experience as retail investors ± 8 have accounts with 3 or more digital
(33.3%). 5 participants had invested for 5 trading platforms, including at least one
or more years (24 to 30 years, 23.8%). bank trading platform alongside other
new low‑cost trading platforms (38.1%)
± Participants’ income ranges included:
± 6 earned $40,000 or less (28.6%)
± 12 earned $40,001 to $80,000 (57.1%)
± 3 earned $80,001 or more (14.3%)
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Insight 1: Taking on risk was about
taking on opportunities
Participants recognised that investing was a The impact of COVID‑19 was seen as
risk, but ultimately they wanted to increase an opportunity for young investors.
their wealth; “you’ve got this income and want
Lockdown restrictions in Australia allowed
it to be active” (Toni, female, 28 years). This,
participants more time to focus on their
they explained, was best achieved by investing
investing education and decision‑making,
on the stock market, sometimes alongside
while others described having “extra
other investments. They had faith that the stock
money” that would otherwise be spent
market – over time – would build their wealth.
on socialising, travelling and working
(e.g., going out, transport to work):
Building wealth for the future mitigated
risk; participants stressed that holding
investments for long periods of time and
“...I've been investing for about two and a half,
maintaining long‑term financial goals (e.g.,
three years now. But I've definitely stepped up
over 10 to 40 years) were the best ways to
minimise the potential of losing money. how much I've been investing since COVID...
I had a lot more time on my hands to properly
Other strategies included making decisions
look at stocks... doing a lot more work, trying
to buy “safer” securities (e.g., ETFs); saving
“emergency funds” before or alongside to figure out how to identify good stocks...
investing; setting up “set and forget” more podcasts... more books... actually
investments; siloing riskier investment products looking at financials and fundamentals... to
(e.g. cryptocurrency) and engaging with increase my wealth, basically.”
these differently; diversifying their portfolios; (Mike, male, 22 years)
trialling different trading apps and platforms
to see how they change the experience
of investing; changing their approach to
investing as they became more experienced;
engaging in financial education activities
(e.g., listening to podcasts); learning from “...actually I put up my first investment
earlier mistakes; justifying their decisions to right before coronavirus, which is a little
others; and talking with friends and family. unfortunate... also made me very hesitant
during that period to invest more, which
in hindsight would be one of my biggest
mistakes I've made so far, not capitalising on
the big downturn in the market and thinking
it would continue to go down for a while.”
(Simon, male, 29 years)
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Even participants who did not increase how Participants also recognised that investing
often or how much they invested from 2020 was becoming more popular in their social
onwards described market volatility as an networks but that this was not only prompted
opportunity, albeit one they recognised in by the pandemic. For example, Edward (male,
hindsight. The risks of investing during the 25 years) noticed more friends were starting
pandemic were countered by participants’ to invest, particularly in cryptocurrencies, and
long‑term investing goals. Participants, like that they used newer platforms like EToro
Arya (female, 28 years), were initially worried or Spaceship rather than the online bank
about the pandemic’s impact on their wealth, brokers that he used. Rhys (male, 30 years)
but stressed that their planned time horizon also suggested that young investors inspired
(length of time of holding an investment) others to get involved; his investing practices,
would likely counter any significant risks: for instance, motivated his ex‑partner to get
involved last year. There were several examples
where partners would motivate and discuss
“I feel quite lucky… it's been smooth sailing... investing and investment practices with
then COVID happened and there was a bit each other.
of “Oh, is everything gonna go terrible?” But
at that time I decided to buy more. And then
Some participants siloed their higher
risk investments and “extra” money
that turned out really well... you can look at
away from “safer” investments.
the past and the global financial crisis and
Engaging in more speculative practices
there are times when it's risky… What I keep
was an additional, not primary practice.
coming back to is the timeframe... it's risky
Short‑term or speculative investing was a risk
if you're going to need your money out in the participants described being comfortable
next year or two. But because I'm much more with; they described investing extra money
of a long term investor, I'm not worried about or money they could “afford to lose”. This
it... I don’t plan on touching it for decades... approach also helped to buffer feelings
it might change if I want to buy a house one of loss if their stock choices failed:
day... then I might be a bit more worried.”
“I invest in things that are long term focus...
day‑to‑day performance doesn't really matter
Similarly, Scott (male, 30 years) avoided the
and therefore affect me. Then, anything else is
“hype” and volatility of the market during the
pandemic and reiterated their long‑term goals: a bit more speculative... I'm happy to write it
off, going in with that mindset, obviously you
hope it doesn't, but if it does, that's okay.”
“COVID was probably a good example of (Rhys, male, 30 years)
that... the huge volatility particularly at the
start... my policy is to see if markets have gone
down and or going down... I don't even log in Although some participants had initially
and look at my portfolio... you don't want to engaged in higher risk investing and described
let that sort of impact you... But what are my “getting burnt,” all had now stopped or
siloed their more speculative investing.
objectives? My objectives are very long term so
what happens today and tomorrow is sort of
irrelevant, irrelevant to what my goals are.”
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Buying ETFs helped participants to reduce Participants associated the relative
their risk, avoid the market’s volatility and predictability of ETFs with emotional
– importantly – manage their emotions. stability. For Scott (male, 30 years), this
meant that “there’s really not much
Buying ETFs was described as a safer approach
emotion attached to it” or, as Edward
and less like gambling than buying individual
(male, 25 years) described, ETFs remove:
shares. As Daisy (female, 28 years) indicates,
she chose to “invest more in ETFs and things
where the gains are not as high, but it's a
“emotional attachment... you just regularly
bit safe[r].” ETFs were also seen as more
attractive options for participants as they top up and stick to your routine… you
grew older. They anticipated incorporating just have this total confidence that it’s
ETFs more frequently into their portfolios as either going to ride out or if it doesn’t…
they entered later life stages where taking on everyone’s in the same boat as I am.”
higher risks was discussed as less appealing.
Sometimes, buying ETFs was boring for Edward
“[It] just depends on what you invest in, so he also purchased cryptocurrencies and
to be honest... investing in ETFs, over individual stocks “more to keep it interesting.”
30 years, there's virtually no risk, in my Investing in ETFs also opened up new, more
opinion... if your investment’s not worth accessible methods of trading. Emerging
more in 30 years, you have more than your digital trading platforms that offered low or no
investments to worry about, like something's fees to buy ETFs were appealing to investors
obviously going pretty wrong..." like Nancy (female, 28 years) because they
provided opportunities to invest automatically:
(Noel, male, 19 years)
“I use Superhero and the main reason was the
Likewise, Janice (female, 29 years) preferred no fees... no fees on ETFs so that's kind of just
to invest in ETFs as, to her, they offered more what I use it for... I also use Spaceship because
predictable returns, relative to other products:
it also has no fees on the first five grand... that
was appealing to me because I'm doing quite a
“If you want to do a bit of small trading or [buy demanding uni degree at the moment. And so
a] small company, whatever, that's fair enough, being able to put little bits in, here and there
I wouldn't overwhelmingly put as much of it [was appealing]... I just liked the idea of having
in my portfolio, I would probably only put the two different things even though Spaceship
majority of mine in something like a pretty is ETFs as well... just to try them both out.”
general ETF, that's not necessarily going to
get the best returns but it's more of a given
than chucking it all on AfterPay or something
like that. That's more of a gamble to me.”
Navigating uncertainty: Australian young adult
14
investors and digital finance cultures — August 2021On the other hand, cryptocurrencies were
perceived as riskier investments than equities
given their instability and complexity.
“...crypto is such an – I just wish it
didn't exist, honestly, because it gives Eleven of the 21 participants held
me FOMO all the time... it's really hard cryptocurrencies alongside their other
investments. Only one participant’s portfolio
to be able to get an understanding of
was primarily invested in cryptocurrencies,
it from my perspective. I understand a
and that person felt they had too much of
little bit about blockchain technology. their portfolio invested in this way. Other
But yeah, I know people that have participants preferred to invest a relatively
made hundreds of 1000s of dollars small portion of their portfolio in this newer
buying and selling crypto like friends market. Like Daisy (female, 28 years), who holds
of mine. So that's a little hard for me cryptocurrencies, many participants expressed
that it was overwhelming learning about
to comprehend sometimes.”
cryptocurrencies and so they were reluctant
(Simon, male, 29 years)
to invest more income in this asset class:
“...the goal is to own a house in X years
time, but until then, the things we “We [her and her partner] did [buy
might be able to do are quite limited. cryptocurrencies] recently. It is really
And I think investing in equities is like a daunting world. And a lot to wrap
one of them... any sort of emerging your head around. And I would say we
markets or emerging assets that come still don't know a huge amount [about it],
through, I'm definitely keen, like if but we only invested a tiny amount.”
something else comes out, that's the
next cryptocurrency, I'm all for it, all
aboard... until I can get my foot in the For those who did not hold cryptocurrencies,
door in the property market, this is the uncertainty surrounding cryptocurrencies
where I'm investing.” and their relatively short history motivated
(Meg, 26 years) these participants’ curiosity and “fear of missing
out” on potentially substantial returns, but also
their reluctance to buy into something they
“I haven't done any research on it really
didn’t completely understand. While many
apart from, you hear stuff and I'm sure
did not rule out buying cryptocurrencies in
there are plenty of gains to be made. the future, they noted that understanding
But I don't know, I just don't really blockchain technology and decentralized digital
know much about it, haven't really currency was far more complex than the asset
taken the time and the fact that it's classes they currently invest in. Darryl (male,
unregulated and a tweet can wipe off 24 years), who holds some cryptocurrencies,
preferred to focus on buying ETFs, arguing that:
billions or whatever... I'm not ruling it
out for the future but I just don't really
want to right now, because I don't have “I believe in the underlying like block
that much money to invest right now... chain technology more than the currency
I see it more as a gamble right now.” itself if that makes sense? I'm not jumping
(Janice, female, 29 years) [completely] on the wagon just yet.”
Navigating uncertainty: Australian young adult
15
investors and digital finance cultures — August 2021When asked about poor financial advice,
many participants shared that they were
frustrated or amused by “overhyped” Key insights
cryptocurrency recommendations
shared on social media, for example, “the Participants recognised that investing
whole Dogecoin thing... people act like on the stock market did not come
they know what they're talking about” without risk. They negotiated the risk
(Ethan, male, 19 years). Some noticed
of losing their money by preferring to
that people in their social circles often
invest – at least in part – over a long
talked about the excitement of investing
in cryptocurrencies (akin to gambling or time period. While the volatility of the
a hobby) rather than equities (which was market during 2020 and beyond was a
framed as a personal financial topic), and concern, most saw the volatility arising
that these currencies were entry points from the pandemic inspire, rather
for new investors. Much of the “hype” than inhibit, opportunities to invest.
about investing on social media, they
explained, was towards cryptocurrencies,
not investing in general. Investing in ETFs or siloing their riskier
investments away from their longer‑term
We asked the majority of participants
if they would potentially buy a investments were strategies to navigate
cryptocurrency ETF. Most participants risk. Even though just over half of the
disliked the idea, citing that it would participants held cryptocurrencies,
require considerable research or that many were still uncertain about
an ETF would go against the nature cryptocurrencies as a primary or
of cryptocurrency as a decentralised
sustainable investment product.
investment. Of the five that would
consider buying a cryptocurrency
ETF, most were curious about it
and shared that it depended on
their existing portfolio, financial
goals and how they invest.
Navigating uncertainty: Australian young adult
16
investors and digital finance cultures — August 2021Insight 2: Sometimes investing was
gambling, for other people, but it
wasn’t a gamble for informed and
long‑term investors
For some, investing was like gambling; For others, like Wayne (male, 22 years),
for others, this analogy did not capture gambling offered few wins, unlike investing on
their experiences of investing. the stock market which offered the potential
of wealth through compound interest. He also
For most participants, particularly less
stressed that because he earnt his money,
experienced participants, investing was
through casual work, he did not want to waste
gambling if an individual had a short‑term
it on a poor investment decision or gambling:
focus; whereas investing with a longer
time horizon and engaging in financial
research and “due diligence” practices –
“I’ve gambled my money like two or three
“making informed decisions” (Simon, male,
29 years) – countered the potential for times, and I've lost every time... a few of my
investing to be perceived as gambling: mates would love to go to the casino... I'd go
there and lose 50 bucks and then be like “This
sucks, I don't know why you guys get around
“If I had more of a gambling mindset, I this”... I think everything that I've set up at the
probably would buy stuff and sell it, within a moment I put into the market… now I'm in my
month and then buy something else... for me, final year of uni and work. I'll start working
it's more long term. [I] focus on why did I buy full time next year... the main thing that I've
it? I'm thinking that green energy will take off learned from listening to podcasts… [is] the
in the next 10 [years], it has to be a thing in the power of compounding interest and on the
next 20 years.” importance of starting investing early... all of
(Becca, female, 26 years) this money that I put in now... obviously, I'd
be pretty devastated if I lost it all. But I don't
think it'd be the end of the world for me...
it's just like a great learning experience, like
having skin in the game... when you actually
“I guess my original style was gambling...
have your hard earned hours put in late at
that's more like day trading, I wouldn't
night at a [casual job], the money you earn
say that's investing. But when it comes
there, you earn, like you're truly invested
to investing, I don't think it's gambling...
in [it]... when you put that money into a
more long term, it’s not a gamble.”
company, you want to see the compounding
(Warren, male, 30 years)
returns... if you lose that money, then, oh
shit, you really have to pay attention to this
stuff... this stuff's important... definitely
not a gambling addiction for me.”
Navigating uncertainty: Australian young adult
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investors and digital finance cultures — August 2021Among participants who disagreed with the Dennis (male, 21 years) reflected on his friends’
analogy between investment and gambling, investing practices:
some also expressed that investment was
not gambling as they did not want to be
seen to be addicted to investment. Others “...they mostly just talk about crypto... most
highlighted that investment was not of them are kind of just in it, to see [it] a bit
gambling if an investor carefully considered short, it's a bit like gambling. Basically, they
their decisions and was not impulsive.
kind of think... the stock market [is] like a
money machine, just put the money in it or
“If you're not trading shares that you take it out like a week later, they’re trading
understand... that is a gamble, to follow crypto like six times a day or something.”
someone else's portfolio without hesitation,
it is just a massive gamble... I like to research
stocks. I know what information I'm getting. and then compared this to investing
in an ETF that tracks an index:
And I can analyse it myself and then see if
I think it's a good investment, I'll follow it.
But I mean, social trading might be good “...it could be similar to gambling or it might
for looking at ideas with shares. You might not be like that overall... you know things
see companies you haven't seen before... but like ETFs, they tend to go up, so that's my
there's no point just seeing someone buy. understanding... I feel it's not much of a
Like, if Warren Buffett went and bought a gamble if you just put your money into an ETF
whole bunch of Tesla shares tomorrow doesn't like in ASX200 or something, that's not really
mean I'm going to go out and buy Tesla shares a gamble. If your philosophy is like I’m in this
either.” for 60 years or whatever you know, 50 years.”
(Max, male, 22 years)
Even when participants explained that investing
For some investors, whether investing is akin was dissimilar to gambling, some described
to gambling depended on the asset classes their investing practices and decision‑making
involved. Cryptocurrency investment tended using language associated with gambling
to be labelled as gambling, whereas ETF (e.g., “having skin in the game” or “pretty safe
investments were not classified as gambling. bet”). This suggests that teasing apart the
relationship between gambling and investing
is complicated. There are limited ways for
participants to talk about investing, risk and
enjoyment that avoid gambling metaphors or
referencing behaviours that have been linked
to gambling practices (e.g., justifying their
skills rather than chance, attribution bias etc.),
regardless of whether or not their investing
practices were gambling. Only two participants
shared that they engage in gambling: for Rhys
(male, 30 years), an experienced investor,
sometimes investing was akin to gambling
which, for him, was entertainment, “I often
gamble and I’m not gambling to win.”
Navigating uncertainty: Australian young adult
18
investors and digital finance cultures — August 2021Chin (male, 24 years) was ambivalent
about the relationship between
gambling and investing, and described Key insights
feeling accomplished in comparison to
others when a trade was successful: Participants were reluctant to embrace
the analogy between investing and
gambling. Investing with perceived
“I definitely enjoy investing and
adequate due diligence as well as
trading, because it's like a hobby... I
long‑term investing moved participants’
mean, you can say it is gambling... but
actions away from gambling. Participants
I don't think it is gambling in a sense,
acknowledged that, in some ways,
because it’s not where the house has
investing without adequate research or
an edge... let's say your trade comes up
investing with impulsivity resembled
profitable, it's more like it gives you a
the addictive nature of gambling.
sense that you did something different
or did something well compared to
what others are doing. So that sense of The types of asset classes of investment
accomplishment... I enjoy that feeling.” play a critical role in determining
the similarity between gambling and
investing. Cryptocurrency investments
Recent research has considered how were similar to gambling, whereas ETFs
investing is becoming closer to gambling were seen as more sensible. There was
(e.g., through gamified brokerage some evidence that gambling apps and
platforms39). However, our project investment platforms are becoming
shows that that the reverse is also more similar, with similar strategies
occurring, as Edward (male, 25 years)
used across both types of platforms.
suggests in his reflections that gambling
is becoming more like investing:
“...there definitely is a likeness between
the two, like the rush that you get,
like that good feeling when something
goes up... like how a lot of people
probably moved into investing when
there was a lack of sports gambling
[during COVID‑19]. And recently I even
saw that SportsBet brought out an ad
where they're trying to make the app
look like a stock, like a watch list sort
of thing. And they literally say, like,
“Yeah, just like the share market.” So
I think that there is quite a similarity.
But in terms of the long term stuff,
ETFs less so. But it is always a gamble.”
Navigating uncertainty: Australian young adult
19
investors and digital finance cultures — August 2021Insight 3: Financial futures and current
life stages shape young investors actions
Participants’ investing practices were Starting to invest when young was
related to their future planning; investing important to participants and being a
in their own financial security and younger investor was perceived to come
independence was seen as imperative and a with opportunities that excluded older
pathway towards having control over their investors.
lives now and especially into the future. Investment decisions were related to
As Dennis (male, 21 years) suggested, investing and justified based on participants’ age.
“definitely makes me feel like I have a bit Participants generally believed that youth
more control over my financial situation and was a time when it was less potentially
takes away some of the stress.” Investing was dangerous to make high‑risk investment
thought to empower you to be in control of decisions. Participants suggested that as age
your own life and take control of your future: increased, riskier investing strategies should
“it just doesn’t make sense not to invest in decrease. For many participants, like Dennis
your own future” (Anders, male, 22 years). (male, 21 years), youth was demarcated
as a period ending in one’s thirties:
Participants explained that it was important
to start investing early – as a young adult – as
investing was like a “security net,” enabling
“Maybe my mid‑thirties, to be honest,
them to feel some control over their uncertain
or early 30s... I think once I hit 30, I
futures and carve out a pathway for their
wellbeing. The goal was to build up enough might be a little bit more risk‑averse
capital to do this (although this was a symbolic you know... probably that age.”
rather than explicit figure in the discussions),
and as Aryay (female, 28 years) articulated,
it was critical to “have enough to not be This was a period before middle adulthood
worried about my future.” Similarly, Jenny and before life events that required greater
(female, 23 years) justified that she was: personal, social and financial responsibility
such as full‑time work, moving out from the
family home, starting a family and gaining
“building my own financial security net... home ownership. Warren (male, 30 years), for
the main mistake is people saying I'll sort it instance, explained how his “investing risk
out in my 30s and 40s. I mean, waiting 10, 20 appetite and investing outlook has changed,”
years is probably the biggest mistake most as he grew older, recently invested in property,
and became “married, so that's changed, I was
people can make, rather than maybe just
single when I started [investing] and I've got
losing $500 on a really bad investment.”
to, I guess, be a bit more risk‑free and go in
for a long term [strategy] now.” Participants
described planning to change their investing
strategies as they grew older and most planned
to do this by focusing their portfolios towards
buying ETFs. ETFs were perceived as more
stable and “safer” longer‑term investments than
individual shares or other investing products.
Navigating uncertainty: Australian young adult
20
investors and digital finance cultures — August 2021Families – particularly fathers – were For some participants, being younger
often integral to participants’ investment meant they were more open to trying
journeys, not just as support but also for new and riskier investment techniques,
investment advice or encouragement. but this was not always successful.
Families, and some partners and friends, Edward (male, 25 years), for example, discussed
recommended investing or, for some, how he “invested [while] in uni when I was
provided economic capital to invest. like 21” and developed his interest from his
Participants who were living with parents or family: “my parents are big into it, so I've
their families of origin at home, in full time always been interested in it.” While he clearly
study, or financially supported by parents had some guidance and resources from his
had “extra” time and income, away from the family, he talked about starting investing
demands of full‑time work and home duties when he felt “pretty naïve.” During this time
or housing expenses. They had more “extra he “got burnt”, a familiar experience for some
money” to invest (a higher percentage of their of our participants, which was framed as a
income, in comparison to other participants learning experience. Similar to other “burnt”
with higher income but who invested smaller participants, this resulted in Edward doing
portions of income overall) and more time “a little bit more research” into the stocks
to do their “due diligence” and research their he was interested in. Getting burnt or losing
investment decisions. Some participants money was emotionally upsetting but this
explained that they had support to take on was manageable, in part, as it motivated
greater investing risks, which often came from participants to change how they invested
parents, but this would likely change over rather than inspire them to keep trying to
time, as Dennis (male, 21 years) explains: “win” through risky or ill‑informed strategies.
Financial security and financial
“I think once you hit 30 you can't go to independence, for many, was explained
the mum and dad bank... maybe before as enabling current or future job
then I could go to mum and dad and be flexibility and having choices about how
like “Mum and dad help… please help!”
and when participants would work.
But yeah after 30 I think mum would be For some participants, investing helped them
like, “No, sorry, you’re an adult now!” to feel more secure about their future finances
so that they could feasibly change jobs or move
industries in the future without being worried
about their income. For participants, having
choices was in part supported by the financial
security that investing potentially would lead to:
“I'm investing to become financially
independent and be able to look after myself
in the future, my family, not be dependent on “Obviously, there's a work‑life balance thing.
the traditional nine to five.” And I've actually just recently quit my job and
(Jenny, female, 23 years) I'm about to go travelling. So I like the idea of
having a bit of money so that I can do things
like that so that I can go and take an extended
break from work if I feel like it.”
(Arya, female, 28 years)
Navigating uncertainty: Australian young adult
21
investors and digital finance cultures — August 2021For women, investing was not only We note that these gender inequalities may
perceived to contribute towards potential persist into the future as they influence
job flexibility, but also it provided women’s on‑going financial planning and
a way to address disparities in the decision making rather than discontinue
gender pay gap and create independent as they continue building wealth.
futures without relying on a partner.
Investing was an opportunity for some agency
towards the direction of one’s own future “And I think, already a couple of times,
without being reliant on a partner or family. financial independence has been a term that's
Investing and financial security were also been used. And I think that really appeals
discussed as crucial for participants’ retirement to a lot of women, this idea that we don't
plans. There were some distinctions between need to have a husband or rely on a man or
men and women on this point, which relate rely on family members, or whatever we can,
to broader concerns about retirement, and we’re just as capable as other people. And
these concerns influenced their decisions
that, yeah, we can take things into our own
about their financial goals. For those who did
hands a bit.”
discuss retirement, all participants identified
investing as a strategy to retire earlier – (Arya, female, 28 years)
“probably want to retire earlier than 60”
(Ethan, male, 19 years) – however women
had particular concerns about having less
money to draw on during retirement. For Investing in shares was seen as an avenue
example, Janice (female, 29 years) associated or stepping stone towards home ownership
her investing goals with her knowledge or participating in the housing market.
of gender disparities for superannuation Property was considered often – at
balances at retirement in Australia: least in the short term – out of reach for
most participants because it was seen as
unaffordable, as Toni (female, 28 years) shared:
“Well, lots of studies showing that females
retire later, but also with way less super.
So working longer, but still earning less “[I]t feels like, where else do you invest if
and putting, having less away, we're going you can't get into the housing market? And
to live longer... living longer with less. you've got to save money somewhere? ...the
And basically there's just higher, way property market, it's really hard watching...
higher, poverty... everyone knows that if we were born 10 years earlier, or 20 years
there's just more of a gender gap, when earlier, then maybe it would have been easier?
you're older, so they get things a bit more Maybe not, who knows? But yeah, it's kind
set aside now, obviously, [when] youth is of hard watching it go up and up and up,
the best time to start building wealth.” and you're trying to save for X amount to
buy X property in the market, but it's just
running away. So even if you are saving,
These gender differences are important; they you can't save at the same rate... I think
point to different motivations for investing that's pretty hard for young people.”
and also how participants interpreted
financial security and independence.
Navigating uncertainty: Australian young adult
22
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