8 most popular investing strategies across Gen Z, millennials, Gen X, and boomers

Investing habits vary across generations due to differences in financial goals, risk tolerance, and market exposure. Each generation employs a distinct mix of strategies to build wealth. Younger generations, such as Gen Z, tend to explore a broader range of options.

A Charles Schwab Modern Wealth survey, updated as of March 2024, examined the investing behaviours of 1,000 U.S. adults. The survey found that 72% of Gen Z respondents considered financial advice from social media, compared to 57% of Millennials, 38% of Generation X, and 19% of Baby Boomers.

Gen Z is also starting to invest earlier, with an average starting age of 19, while Millennials began at 25, Generation X at 32, and Baby Boomers at 35. Starting earlier gives younger investors more time to benefit from compounding interest, which can enhance returns over time.

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While Gen Z and Millennials favour growth-focused and tech-driven strategies like short-term trading, direct indexing, and robo-advisors, Generation X and Baby Boomers tend to take a more cautious approach, showing a preference for buy-and-hold strategies and less interest in fractional shares or thematic investing.

Here are 8 most popular investing strategies across Gen Z, millennials, Gen X, and boomers

1. Buy and hold

The buy-and-hold strategy involves purchasing securities and holding onto them for a long period, regardless of market fluctuations. This approach has widespread appeal across all generations. Baby Boomers (60%) and Millennials (59%) are the most inclined to follow this strategy. Gen Z also shows a strong preference for buy-and-hold investing, with 57% adopting this method. Generation X demonstrates a slightly lower engagement (48%), showing a preference for more flexible strategies at this life stage.

2. Growth investing

Growth investing involves selecting stocks or assets with the potential for above-average growth. Millennials (56%) and Gen Z (57%) are almost equally invested in growth stocks, likely driven by long-term goals and aspirations for significant capital appreciation. Generation X (51%) and Baby Boomers (49%) exhibit lower interest in this approach, possibly due to a more conservative outlook as they near or enter retirement.

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3. Fractional shares investing

Fractional shares investing allows investors to purchase portions of a share, making expensive stocks accessible even with limited capital. This method is particularly popular among Gen Z (48%) and Millennials (48%), who are often in earlier stages of wealth-building and may not have large sums of disposable income. Generation X (33%) and Baby Boomers (25%) show a declining interest, as these groups may have more established portfolios and higher overall wealth, making fractional investing less necessary.

4. Short-term trading

Short-term trading involves frequent buying and selling of stocks or other assets to capitalise on short-term price movements. Gen Z and Millennials (both 52%) are the primary adopters of this strategy, likely due to their comfort with digital trading platforms and higher risk tolerance. Generation X (31%) shows less enthusiasm for short-term trading, while Baby Boomers (20%) are the least engaged, favouring more stable investment options as they seek to preserve wealth.

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5. Direct indexing

Direct indexing allows investors to purchase individual stocks within an index rather than buying an entire index fund. This approach has gained traction among Gen Z (44%) and Millennials (42%), who may value the ability to customise their portfolios. Generation X (26%) and Baby Boomers (23%) are less interested, perhaps due to the complexity of direct indexing and a preference for more passive strategies, such as mutual funds or exchange-traded funds (ETFs).

6. Socially responsible investing (SRI)

Socially responsible investing focuses on assets that meet certain environmental, social, and governance (ESG) criteria. Millennials (45%) and Gen Z (43%) show a strong commitment to SRI, aligning their investment choices with their values. Generation X (27%) and Baby Boomers (17%) demonstrate considerably less interest, likely due to their focus on more traditional financial metrics and possibly a reduced priority on social issues in their investment decisions.

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7. Robo-advisor investing

Robo-advisor investing uses automated platforms to manage portfolios, providing cost-effective and efficient access to investment management. Gen Z (40%) and Millennials (41%) are the primary users of robo-advisors, attracted by the simplicity and low fees. Generation X (25%) and Baby Boomers (11%) are less engaged with this technology, potentially due to a preference for personalised advice from human advisors or a distrust of automated systems.

8. Thematic investing

Thematic investing involves focusing on specific trends, such as technological advancements, demographic shifts, or environmental changes. Gen Z (41%) and Millennials (41%) are almost equally interested in thematic investing, reflecting their focus on emerging industries and future growth opportunities. Generation X (20%) and Baby Boomers (9%) show less interest in this strategy, as they may prioritise diversification or income-generating investments over trend-based approaches.