Here we go again.
An article in Fortune magazine recently talks about the older members of Generation Z, those 20-somethings who have come of age in the era of financial crisis and global pandemics—and how they are trading much more than their predecessors.
The article attributes their investing behavior to good old-fashioned FOMO (fear of missing out). While younger folks are putting more money into stocks—which is a good thing—they are also trading in and out of the market more often… which is a not-so-good thing.
To actually make money, you have to do this instead…
Financial influencers and social media sources are reportedly a major source of trading inspiration and ideas for younger folks seeking quick profits.
It does not help that the trading apps that run right on your phone, as well as a no-commission trading environment, encourage activity. The article quotes sources who work for trading platforms as pointing out that these younger investors have access to fancy tools that were not available to previous generations, so they have an advantage that will reverse the trading dynamics that have been in place since the dawn of time.
That is hogwash: there are no new tools.
There are, instead, new delivery methods. Today, I can get both my memes and my charts right on my phone in seconds. The last group of market dynamic-changing younger folks had to wait for the whistle, bleet, burp, and buzz of a dial-up connection hitting paydirt before they could view all these tools.
Your odds of becoming a successful short-term trader are the same as they have always been: about 3% or so of retail traders are successful.
That is not “make a zillion dollars and live in a castle on the beach” successful. At best, it’s “did not lose all your money and have to live on your cousin’s couch for a few months” successful.
Most retail traders will in fact lose money. That has always been the case, and always will be.
It is not because of some evil conspiracy to prevent them from making money. Wall Street does not really give a flying anything about who does or does not make money as long as…
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