Apex Fintech Solutions (“Apex”), the “fintech for fintechs” powering innovation and the future of digital wealth management, today released its Second Quarter 2022 Apex Next Investor Outlook (“Q2 ANIO Report” or the “report”). The report, which analyzes proprietary data of U.S.-based investors who trade through introducing brokers on the Apex Clearing platform, sheds light on the top 100 stocks1 held by investors across four generations, as of June 30, 2022, with a special focus on the rising Gen Z2 demographic. The report also includes an analysis of cryptocurrency trading data across the platform. Please note the report is not intended as securities analysis nor as a recommendation to buy or sell any investment and is meant for informational purposes only.
Apex data reveals that retail investors, and specifically Gen Z, fear a recession might be imminent. Consistent with the first quarter report, Gen Z investors continued to focus their investing on traditional stocks throughout the second quarter, seeking safety in dividends over high-growth companies. Verizon, Home Depot, and McDonalds rose significantly to #38, #39, and #40, respectively, while income-generating dividend players and energy shares such as Costco, Abbvie, and Chevron maintained investment momentum. Similar to previous quarters, the stocks held within the Gen Z top 10 included Tesla, Apple, Amazon, and Microsoft.
Moreover, Gen Z, a generation that typically has less discretionary income to spend on risky investments, mirrored this shift within the crypto environment through defensive reactions to recent market upheaval and fears of a crypto winter. Publicly traded crypto stocks, including Coinbase, Marathon Digital, Grayscale Bitcoin Trust, and Riot Blockchain, lost significant value during the second quarter of this year. Specifically, Coinbase dropped from its prior ranking of #36 to #73, while Marathon Digital, Grayscale Bitcoin Trust, and Riot Blockchain fell out of rankings entirely from #59, #70, and #91, respectively.
Despite Gen Z investors veering away from crypto stocks during the quarter, data reveals millennial investors remain bullish, particularly in the flagship cryptocurrencies of Bitcoin and Ethereum. There were approximately 370,000 new crypto-enabled accounts opened in Q2, bringing total end crypto user accounts to over 4.9 million. Broken down by generation, millennials represented 54% of crypto-enabled accounts, with Gen Z and Gen X each accounting for 21%. Baby boomers held just 4% of crypto-enabled accounts as of June 30, 2022.
“This quarter’s results indicate that recession fears are accelerating with investors seeking safety in stable, income-generating dividend stocks against the backdrop of market volatility. Further, by expanding our quarterly report to analyze the behavior of Apex Crypto users, we gain a deeper, multidimensional understanding of ongoing mindset shifts across the retail community, including this rapidly growing sector of the economy,” said Connor Coughlin, General Manager, Fintech at Apex Fintech Solutions. “As market uncertainty continues to mount, Apex is fully equipped to shed light on the inner workings of the investor community through this increasingly important report.”
Overall, the report analyzed more than 1.4 million Gen Z accounts, as well as more than 4.2 million millennial accounts, 2.1 million Gen X accounts, and 0.6 million baby boomer accounts.
Themes in the Apex Q2 Next Investor Outlook include:
- Finding Safety in Dividends – Younger investors continued to embrace dividend stocks, perhaps searching for safe harbor amid fears of a recession.
- Well-known, income-generating companies climbed the rankings, including Walmart, which rose nine spots to #36, Verizon, up 22 spots to #38, and Home Depot, which gained 14 to spots #39. Food and beverage stalwarts also did well; McDonald’s rose 16 spots to #40, and PepsiCo gained 18 spots to #44.
- Natural gas distributors offering healthy dividend yields posted gains, with Enterprise Products Partners climbing 18 spots to #70 and Energy Transfer ascending 25 places to #72.
- A Crypto Winter Is Coming, According to Gen Z – Gen Z investors appear to be gearing up for a sustained slowdown in the cryptocurrency market by moving away from publicly traded crypto-related stocks.
- Coinbase fell 36 spots to #73, while three notable names exited the rankings altogether. Digital asset technology company Marathon Digital, Grayscale Bitcoin Trust, and Bitcoin mining company Riot Blockchain dropped from #59, #70 and #91, respectively.
- Millennials Keep the Faith in Flagship Cryptocurrencies – Despite a tumultuous quarter in the digital-assets ecosystem, millennials kept the faith in flagship cryptocurrencies Bitcoin and Ethereum.
- Bitcoin saw its price versus the U.S. dollar slump more than 50% in Q2 2022, but that apparently wasn’t a deterrent to investors, as approximately 1,050 accounts opened a position in Bitcoin each day throughout the quarter. Millennials showed particular interest in Bitcoin, accounting for about half of the 591,000 accounts that hold the cryptocurrency.
- Ethereum saw its price versus the U.S. dollar slide nearly 70% in Q2 2022, but approximately 780 accounts opened a position in Ethereum each day during the quarter. Millennials made up approximately 50% of the accounts holding Ethereum.
- Summertime Sadness for Travel Stocks – Travel demand is booming as bookings near pre-pandemic levels, but Gen Z investors aren’t impressed. Costly fares, staffing complications, and scheduling nightmares are souring the picture for big-name travel stocks. Early glimmers of economic pressure might also be dampening support.
- United Airlines declined six spots to #47, while American Airlines and Delta were each down eight spots to #48 and #50, respectively. Airbnb sunk 19 places to #63.
- Cruise industry rankings also slumped. Carnival fell 29 notches to #65, while Norwegian Cruise Line Holdings dropped out of Gen Z’s top 100 altogether.
- All aboard Elon Musk’s Twitter train – As news of Elon Musk’s proposed takeover of Twitter took center stage throughout the quarter, Gen Z investors reacted enthusiastically, propelling Twitter to join the Gen Z top 100 at #52. Likewise, in Tesla, more Gen Z investors bought into the electric vehicle maker, maintaining its top spot in the rankings.
- Gen Z support for Tesla also stayed strong. The electric vehicle maker retained the #1 spot and grew its position count among Gen Z by 5% in Q2 2022 versus Q1 2022.
- Cross-Generational Crypto Users Buying the Dip – Users with crypto-enabled accounts placed nearly four million trades on the Apex platform in Q2 2022, of which nearly three million were buy orders. As global markets sold off and recessionary drumbeats grew louder, crypto-enabled investors across all generations showed steady interest as buy orders outpaced sell orders for Gen Z, millennials, Gen X, and baby boomers.
- Crypto millennials led the charge, placing over 1.4M buy orders versus 580K sell orders (70% buy); Gen X placed 900K buys versus 300K sells (75% buy); baby boomers placed 170K buys versus 60K sells (75% buy); and Gen Z trailed behind placing 300K buys versus 160K sells (65% buy).
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