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The rise of younger investors

24 September 2021

8 minute read

We interview some of our younger colleagues at Barclays as they share their experiences of investing so far.

Who’s it for? Investors with basic investment knowledge

Please be aware, this is not advice and the value of investments can fall as well as rise, so you may get back less than you put in. If you are unsure about what to do next or aren’t confident about making your own investment decisions, please seek independent financial advice.

An increasing number of millennials and Gen Zers have started investing their savings in the last 18 months as they look to seek positive real returns on their money set aside for the long term.

All investors, no matter what their age, have a different trigger to start them on the road to investing.

Some of our younger colleagues at Barclays share their experiences of investing so far with food for thought for newcomers to the stock market.

Robert Smith, Head of Behavioural Finance at Barclays, also provides some commentary to help guide readers through our colleague’s different approaches. He says:

“It’s great to hear the stories of different young people making the journey from savers to investors. After all, it is the potential rewards for starting early that can be significant.”

India Smyth – Senior Media Relations Manager

When did you start investing and why?

I inherited a small portfolio from my grandmother at a relatively young age, which held two single stocks. But it was only in my mid-twenties, when working in finance, that I was really introduced to the concept of investing. At first I didn’t know where to start, but once I’d taken the time to do a bit of research I needed very little convincing about the benefits of long-term investing.

What are you investing for?

My pension and for more general long-term plans. I’m in my early thirties and feel it makes sense to invest as much as I can into my pension. In the future I may well have children and other commitments that will undoubtedly eat up any spare income.

I keep enough in savings to cover emergency expenses (I’m currently dealing with a leaky roof!) and invest anything spare for whatever the future brings.

How is your money invested?

I largely invest in funds that invest in a mix of strong, well-established companies with a reputation for innovation. I also like ready-made funds where a mix of funds is selected for me.

I have a lower risk core investment pot, and then a smaller, more speculative pot where I invest in higher risk investments in the hope that I might see better returns over the long term.

Do you worry about stock market falls?

I get nervous when I see a big drop – that’s human nature. But I’m also aware it’s part and parcel of investing.

What is your top tip for new investors?

A little bit of risk isn’t a bad thing. By having a separate “satellite” set of investments you can still have a bit of fun and try out different approaches, knowing you have your well-balanced core portfolio.

“India appears to be doing a good job of spreading her investments using different funds. The use of ready-made investments makes perfect sense for any investor, but especially those that are less inclined to choose investments or simply are time poor. Leaving the selection of investments to the professionals allows you to leverage all of their knowledge and tools. However, the idea of picking individual companies is appealing and what brings many people to investing. This makes sense as it makes your portfolio personal and provides some excitement.

India uses a good approach to tackling this issue by having the majority of your hard-earned money in more boring diversified funds – that are managed to an appropriate risk level for you – then allowing yourself a small amount to invest into specific areas or companies to provide the dreams of higher returns we all naturally desire.

Although, for young investors, your pension may not be at the forefront of your mind, if you are thinking about a Self-Invested Pension Plan (SIPP), it is important to point out that you should consider maximising any contributions you can get from your employers and the advantages of a workplace pension before opening.”

Dillon Nathwani - Digital Acquisition Manager

When did you start investing and why?

I started in February 2019, when I was 22 – I am 24 now. I had been in my job here at Barclays for almost a year and knew I should be investing some of my savings. With interest rates already pretty low, it made sense to look into investing to grow my money.

Do you worry about stock market falls?

It does worry me when I see my investment fall in value, but I know that it’s natural for markets to move up and down.

As my main investing strategy is to use Exchange Traded Funds (ETFs) and I ensure my selection is diversified, I’m relatively confident that this helps me against rocky patches where the market drops. I also now tactically invest in a few shares and big corporations which I know about including retailers, financials and pharmaceuticals.

Has your approach to investing changed over time?

I have started to expand geographically after initially focusing on the US and the UK to emerging markets and Japan. Over time, as I’ve become more confident, I’ve started to invest in single stocks if I’ve seen an opportunity as well as some funds.

What is your top tip for new investors?

There’s no one-size-fits-all. It’s up to you how you choose to invest so you don’t need to follow a single strategy. But you must follow the route you feel comfortable with.

“Dillon talks explicitly about diversifying his investments which is a great start. Including investments across developed and emerging markets, and using funds to do this is a good idea. At Barclays we believe that funds, whether index trackers or active managers, are the best way to achieve diversification. This is because it’s simple - you don’t have to worry about picking the best underlying investments yourself.

Like many investors now, Dillon is using Exchange Traded Funds (ETFs) to spread his investment risk. ETFs can be a really easy and cheap way to get diversification across many markets or asset types and are growing in popularity. Price should not be the only factor in making an investment though, and some may prefer to pay more for a fund that tries to select the best performing companies."

Faye Brightmore - Operational Rigour Analyst

When did you start investing and why?

I started investing when I first started earning my own money at the age of 18. This was to save for a house deposit and later life. I decided to invest this money rather than taking out a standard savings account with the aim of growing my wealth over time. I’m still living with family – I’m 22 – while I save to buy my own house.

How is your money invested?

I invest globally. Mostly I’ve invested in technology companies, or companies where technology has played a big part in their growth.

How do you decide where to invest?

I only ever invest in something that I believe in. Ultimately, if there’s a company that sparks my interest and I can see their potential growth trajectory quite clearly, I will do a bit more research into the company and decide whether to invest.

I get my information from a variety of sources but ensure its reliable and that I have considered trusted opinions. This means I understand exactly what I’m buying and believe in it to withstand any downturns.

What is your top tip for new investors?

Always research in what you’re investing in – use multiple sources and consider different points of view.

Avoid being overwhelmed with information. There’s a lot of content out there but it can be quite daunting as there are so many views. Stick to using established and trusted opinions to help with your decisions.

“Faye, as with many young investors appears to be mostly invested in equities, which given her age may be appropriate, especially given her investment are spread globally. An understanding of your time horizon is important as if you think you will need the money in the short term, then no matter your age or strategy, investing may not be appropriate.

Like many of our young investors Faye talks about choosing the individual companies to invest in, and focus on the technology sector. If you are going to do this then, as Faye describes, doing some research yourself and using a variety of sources is undoubtedly vital.

I would just caution that investors should be aware that investing into a small number of companies, or a single industry can be a high risk strategy no matter how ‘certain’ their prospects appear. If any of the companies suffer from unforeseen circumstances it can materially impact your balance. So we would not recommend this approach for all of the money you are saving even for the longer-term.”

Rana Hussain – Graduate analyst

How is your money invested?

Purely in shares. I believe they offer me a good potential return – though I appreciate they’re risky.

I invest in areas I have some knowledge and interest in, including automotive, green energy and technology industries. I’ve avoided emerging markets so far as they tend to be more volatile.

Do you worry about stock market falls?

I’m investing for the long term and understand there will be bumps along the way. I take comfort that historically, there is overall growth.

Has your approach to investing changed over time?

My investing style has changed and I’m sure it will continue to change as I learn more.

I started off with big household name stocks. But once I familiarised myself with how investing works and how companies are valued, I started to dig deeper and eventually bought shares in unfamiliar growth stocks that have potential to add value to society.

Do you have any tips for people based on your own experience?

Start sooner rather than later. When you’re young you have the luxury of more disposable income with not many responsibilities such as family or mortgage payments. So get cracking – it will (hopefully) pay dividends.

"Rana is investing purely in equities, which given her age and time horizon may be appropriate, especially as she clearly understands the risks that come with this. A realistic expectation of what to expect is so important, especially of what can happen over the short-term, as it helps you decide if you are comfortable with what the investment may throw at you.

We also hear many of our investors finding companies that they believe in or appear to have a good growth trajectory. Whilst investing in companies or themes that we think can add value to society seems like an obvious choice I would just urge some caution here. Investment markets are forward looking, so any growth – in dividends and value - anticipated by investors should already be reflected in the current price of the shares. Meaning that you need to believe growth above and beyond what the market expects currently will be likely in order to justify a higher price.

Importantly, by investing early, contributing regularly and understanding the risks of her investments Rana has come a long way on the journey to setting herself up for good investment outcomes.”

Ready to invest?

There is no one-size-fits-all service for investors, so investors can use our services to find a solution that best matches their needs.

If you are happy to make your own investment decisions, Smart Investor could be ideal as it offers a wide choice of investment options: funds, ETFs, investment trusts, shares and bonds.

The Barclays Funds List is a great place to start. Our list is made up of a number of funds from each of the investment sectors we believe are key for building a diversified portfolio.

Alternatively, the Barclays Ready-made Investments (RMI) offer a one-stop shop for investors who want help with their selection. The five diversified portfolios allow you to select the level of risk you are most comfortable with. They invest in passive funds across a range of asset classes – shares, bonds and cash - and regions, offering global exposure. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

If you would prefer to hand over the investment decision-making to a professional, then consider Barclays Plan & Invest. We’ll ask you to tell us a bit about yourself in an online questionnaire and then work out how much you can afford to invest and create a personalised Investment Plan designed to help you reach your goals. Your investments will be chosen and managed by our dedicated team of experts. There are over 10,000 different investment options which is why your plan will be truly personalised. The Plan & Invest service is subject to a successful application.

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