From 10/26/20 – 11/13/20 the FINRA Investor Education Foundation surveyed about 1,300 households.

  • the typical new investment account was opened by individuals age 45 and younger
  • the top reasons for investing include saving for old age (~17%) and the ability to start with smaller sums of money (~16%)
  • the least popular reasons for investing include free time (~2%), “free” trades (~2%) and influence from advertisements (~1%)

The newfound interest in investing doesn’t necessarily correlate with the skillset/mindset for successful investing.

  • about 38% of respondents were new to investing and rely upon friends and family for advice
  • they aren’t averse to day trading
  • they self-reported “low/very low” investment knowledge
  • they scored the lowest compared to experienced investors when presented with a simple test of five questions including “what is a stock?” and “how to calculate the value of call options?”

By comparison experienced investors generally shun fintech and FOMO.

  • regular investing through workplace retirement plans (e.g. 401(k))
  • they source information from financial professionals and company websites prior to making trades

Interestingly neither group relies upon information from regulators or corporate filings with the SEC.