Millennials sharply boosted their ownership of nine stocks in 2018 even as the market's turmoil scared away many investors, including the battered shares of Apple Inc. (AAPL) and Facebook Inc. (FB), and even fallen conglomerate General Electric Co. (GE), per data from no-fee trading platform Robinhood. These large cap stocks have received major support in a down market from Millennial investors, soon to outnumber Baby Boomers as America's largest age group. The majority of Robinhood’s 4 million Robinhood traders are Millennials (ages 22 to 37 years old), so its trading data offers insight into this burgeoning and increasingly influential investor group.
All of the nine favorite picks of Millennials have fallen sharply off their 2018 highs, though several are up for the past 12 months (see table below). All of them initially staged huge rebounds on Friday as part of the market's rally.
9 Millennial Favorites
(1-Year Stock Performance)
· Apple; -18.8%
· GE; -56.5%
· Ford; -41.1%
· Aurora Cannabis; -51.6%
· Cronos Group; 36.1%
· Facebook; -29.5%
· Microsoft; 10.4%
· AMD; 43.5%
· Fitbit; -12.2%
What It All Means For Investors, Not Just Millennials
Millennials boosted their ownership by huge amounts in many of these stocks. For example, their stake rose by 65% in GE, 53% in Ford Motor Co. (F), and 50% in Microsoft Corp. (MSFT). Cannabis stocks Cronos Group Inc. (CRON) and Aurora Cannabis Inc. (ACB) saw 32% and 373% increases in ownership respectively on Robinhood, according to the trading app.
Young Investors Buy Tech on the Dip
Millennials’ love affair with depressed tech stocks may be tested by Apple's earnings warning this week, as shares of the iPhone maker sank 10% on Thursday. It's recouped part of those gains today. Tech stocks have been among the biggest decliners during the market downdraft.
Data from Robinhood suggests that young investors have viewed the sell-off in big tech stocks such as Apple and Facebook as buying opportunities. In the week following Facebook’s disappointing quarterly results this July, 61,307 Robinhood investors added the social network giant to their portfolios. In November, when Apple took a big plunge, the stock regained its leadership position as the most popular on Robinhood, with over 210,000 owners on the app.
Millennials Feed the ‘Green Rush’
A surge in Cannabis stocks was fueled by news of that large tobacco and beverage companies planned to invest in the sector, including Constellation Brands' purchase of a $4 billion-dollar stake in pot producer Canopy Growth. Just as Canada legalized recreational use of the plant, a wave of volatility disrupted the “green rush,” leading shares of Canopy Growth to lose over half of their value since October highs.
These purchases suggests that Millennials favor owning companies whose products they like and are familiar with. Their love for cannabis stocks, one of the most volatile sectors last year, demonstrates their willingness to invest in budding industries. And these young investors' faith in fallen tech behemoths, along with GE and Ford, may indicate that they have a longer term perspective than other investors.