Young investors face first ever bear market

Young investors face first ever bear market

Tesla MotorsTSLA$742.65Buy

Young investors face first ever bear market

AppleAAPL$148.13 Buy

Young investors face first ever bear market

AlibabaBABA$93.25BuyService in partnership with Tinkoff Investments. Quotes are updated every 15 minutes

Stocks popular among young people fall faster than the broader market.

No more growing

Financial services provider Apex screened portfolios of 1.3 million Western investors under the age of 26 years. And he figured out: a large proportion of the portfolios are "hot" and "meme" stocks like Tesla, Apple, AMC и Gamestop.

Apex has compiled a list of the 100 most popular stocks among young investors. And MarketWatch calculated: on average, all these stocks are down 43% from their yearly high. From the beginning of 2022 until 10 May they are cheaper 25%. And index S&P 500 fell noticeably less over the same period - by 16%.

During the 2008 crisis, young investors were no more 12 years, so it's unlikely they were interested in the stock market. And apart from a short-term drawdown in the spring of 2020, then the current recession is the first bear market in their life. This is a drop of 20% or more.

For many years, newcomers to the market have seen, how shares of popular corporations grow by tens and hundreds of percent a year. But that's not always the case.

In 2020, the ARK Innovation Foundation, which includes popular and unprofitable companies like Robinhood, Roblox and Teladoc, became the best and grew up immediately on 150%. This result gave many a false sense of endless success.. Notional Buffett's investment in the real economy seemed ridiculous, if not stupid.

How often it happens, after a while the market put everything in its place. Kathy Wood's ARKK Foundation Has Lost All Its Pandemic Growth Now. So, over the past two and a half years, that is, since the beginning of the pandemic, fund shares fell 21%. But Buffett's Berkshire Hathaway shares have risen in price by 38%.

But the recent euphoria in the market is not a feature of the current generation.. All the same went through the "old people". For example, early 2000s during the dot-com boom. Or in the seventies with Nifty Fifty stock: Polaroid, Xerox, Kodak, Disney, PepsiCo and others. Then the stocks of these growing companies were also overvalued., but then they fell.

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Occupy the largest share in the portfolios of young investors

Tesla (TSLA)19,2%
Apple (AAPL)12,8%
AMC Entertainment (AMC)8,4%
Amazon (AMZN)5,3%
Microsoft (MSFT)3,8%
Nvidia (NVDA)3,3%
Disney (DIS)2,1%
GameStop (GME)2,0%
Alphabet Class A (GOOGL)1,6%
Alphabet Class B (GOOG)1,5%
AMD (AMD)1,5%
NIO (NIO)1,5%
Berkshire Hathaway (BRK.B)1,4%
Palantir (PLTR)1,3%
Lucid (LCID)1,2%
Ford (F)1,1%
Netflix (NFLX)0,9%
Costco (COST)0,8%
AT&T (T)0,8%
Alibaba (BABA)0,7%


How are Russian investors doing?

There are no data on portfolios of young Russian investors. But there is data from analysts from PR News, who in the fall of 2021 made up a portrait of a retail investor. Then the respondents answered, that the key criteria for an attractive company is profitability, growth dynamics and brand.

Seems, The Russian investor is no different from the Western one in his desire to invest in "hot" stocks. A good example is Virgin Galactic..

Back in July 2021, the company conducted a flight with the participation of the founder, and the name of Virgin appeared daily in the headlines. Stocks were worth a little more back then. 50 $, and in the total trading volume on the St. Petersburg Exchange, they accounted for 25%. Now they are standing. 6 $, and it seems, that everyone forgot about Virgin.

Occupy the largest share in the "people's" index "St. Petersburg Exchange" SPB100

Alibaba (BABA)7,9%
Tesla (TSLA)5,6%
Apple (AAPL)5,3%
Microsoft (MSFT)4,1%
Amazon (AMZN)3,1%
Virgin Galactic (SPCE)2,9%
Nvidia (NVDA)2,6%
"SPb-Exchange" (SPBE)2,5%
PayPal (PYPL)2,2%
Boeing (BA)2,2%


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