E*TRADE Study Reveals Young Investors Feel Financially Prepared and Ready to Spend This Holiday Season as Pandemic Fears Dim

(Graphic: Business Wire)
(Graphic: Business Wire)

ARLINGTON, Va.--(BUSINESS WIRE)--Nov 22, 2021--

E*TRADE Financial Holdings, LLC today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results suggest young investors feel confident in their finances and are feeling ready to spend this holiday season:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211122006613/en/

(Graphic: Business Wire)

  • Young investors are ready to take on holiday shopping. The majority of investors under the age of 34 (93%) said they feel financially prepared for the holiday season. And they feel ready despite growing inflation concerns—63% noted they’re worried about inflation, up 9 percentage points from last quarter.
  • Though young investors are more likely to withdraw from an investment portfolio to fund holiday spending. With the market hitting record highs, nearly three out of four (74%) Gen Z and Millennial investors note they will withdraw more money from their investment portfolios to fund the holidays.
  • But the wide majority aren’t using retirement savings. Among the reasons why young investors have withdrawn early from a retirement account, holiday expenses ranked last (10%). Paying for a medical emergency (26%) and funding a large purchase (23%) topped the list.

“After the market’s incredible run, it’s understandable for investors to profit-take to fund holiday spending,” said Mike Loewengart, Managing Director of Investment Strategy at E*TRADE Financial. “But keep in mind that if you’re too quick to draw from an investment account, you could miss out on potential upside. Staying committed to your long-term goals and initial investment strategy is key—consider your savings and investments as separate entities. Holiday spending comes around once a year, so stashing a bit more away in savings can help lighten the burden at year-end.”

Mr. Loewengart offered additional tips for young investors who are looking to save and invest:

  • Stay diversified. A balanced portfolio can help investors ride out market swings, and though this strong bull market has pushed portfolios higher, it’s better to be prepared. If you take out from an investment account, be mindful of your portfolio allocations. Selling too much of one security can throw off the balance of the portfolio you’ve built to align to your goals .
  • Consider tax loss harvesting. If you are going to take from an investment account, consider selling underperforming assets to offset capital gains—a strategy known as tax loss harvesting. This can help reduce taxable income and put you in a better position come tax time.
  • Preserve emergency savings. Life is full of surprises, but it’s pretty much guaranteed that large expenses will arise. Holiday spending shouldn’t necessarily fall under the emergency category. Maintaining three to six months of living expenses is a solid goal and keep in mind it should only be used for true emergencies like loss of a job or loved one.

E*TRADE aims to enhance the financial independence of traders and investors through a powerful digital offering and professional guidance. To learn more about E*TRADE’s trading and investing platforms and tools, visit etrade.com.

For useful trading and investing insights from E*TRADE, follow the company on Twitter, @ETRADE.

About the Survey

This wave of the survey was conducted from October 8 to October 16 of 2021 among an online US sample of 901 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 60% male and 40% female, with an even distribution across online brokerages, geographic regions, and age bands. The <34 (Gen Z and Millennial) data set comprises 228 investors between the ages of 18 and 34.

About E*TRADE Financial Holdings, LLC and Important Notices

E*TRADE Financial Holdings, LLC and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services offered by E*TRADE Bank and E*TRADE Savings Bank, both federal savings banks and Members FDIC. More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.

E*TRADE Financial, E*TRADE, and the E*TRADE logo are registered trademarks of E*TRADE Financial Holdings, LLC. ETFC-G

© 2021 E*TRADE Financial Holdings, LLC, a business of Morgan Stanley. All rights reserved.

E*TRADE Financial engages Dynata to program, field, and tabulate the study. Dynata provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to www.dynata.com.

Referenced Data

How financially prepared do you feel for this year's holiday season?

 

Age <34

Q4’21

Top 2 Box

93%

Very prepared

47%

Somewhat prepared

46%

Somewhat unprepared

6%

Not prepared at all

1%

How concerned are you about inflation?

 

Age <34

Q3’21

Q4’21

Top 2 Box

54%

63%

Extremely concerned

23%

33%

Very concerned

31%

30%

Somewhat concerned

43%

33%

Not at all concerned

3%

4%

Please fill in the following statements with one of the choices below: ** I typically withdraw ______ from my investment portfolio to help fund the holidays. **

 

Age <34

Q4’21

Top 2 Box

74%

Much more

39%

Somewhat more

35%

Somewhat less

13%

Much Less

13%

Have you ever taken out money from an IRA or 401(k) before the age of 59.5 and, if so, for what?

 

Age <34

Q4’21

Yes (net)

64%

Yes, to pay for medical emergency

26%

Yes, to make a large purchase

23%

Yes, to pay for education

21%

Yes, to simply spend on myself or my family

18%

Yes, because I have become unemployed

15%

Yes, to spend on a vacation

14%

Yes, for holiday expenses

10%

Yes, other

1%

Gen Z and Millennials (young investors) are defined as age 18–34 years old

ETFC

View source version on businesswire.com:https://www.businesswire.com/news/home/20211122006613/en/

CONTACT: E*TRADE Media Relations

646-521-4418

[email protected]

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES FINANCE

SOURCE: E*TRADE Financial Holdings, LLC

Copyright Business Wire 2021.

PUB: 11/22/2021 04:05 PM/DISC: 11/22/2021 04:06 PM

http://www.businesswire.com/news/home/20211122006613/en

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