Gold has been around for many years. It has stood the test of time as a reliable haven against economic and geopolitical turmoil. The old go for it since it is dependable. On the flip side, technology has changed many things and with it comes young investors. They are ready for an adventure and discovery which makes them turn to the volatile and nascent crypto industry.
According to a report by JPMorgan, the older investors prefer the stability of gold while the younger go for the adrenaline that bitcoin brings. The behavior of retail investors during the current health crisis varies considerably across these age groups.
In most cases, investors generally are interested in alternative assets that will shield their portfolios from economic meltdown. Strategists led by Nikolaos Panigirtzoglou say that millennials are embracing stocks, mostly the technology shares. On the other hand, older individuals are selling equities.
On August 4 the strategists wrote in an investment flows analysis note:
“The older cohorts continued to deploy their excess liquidity into bond funds, the buying of which remained strong during both June and July.”
The retail demand this year is evident in the 46% surge in stocks worldwide from the March lows. The spike in global holdings of gold-backed exchange-traded funds and the recent rallies recorded in the crypto space indicates that there is a surge in demand for alternative investments.
Inexperienced Gold And Bitcoin Investors
The presence of amateur traders is also being witnessed in everything from smoothed trading action to exuberant options. Notably, their stock picks and market timing seem to fare quite well compared with the institutions.
Bitcoin and Gold ETFs have been recording strong inflows in the last five months since the old and the young see the need for an ‘alternative’ currency. Interestingly, the Bloomberg Dollar Spot Index has plunged by almost 1.7% over the same period. That has kicked off a debate about whether a prolonged period of the dollar’s weakness is at hand.