Sydney, 26 September 2021: Trading and wealth management infrastructure fintech OMG (Openmarkets Group) has analysed proprietary data created by its retail trading platform, Opentrader, that reveals that, on average, boomers & Gen X are making money on meme stocks, while millennials are losing money.
The analysis covered 11 “meme stocks” (stocks whose share prices skyrocketed due to social media hype, not fundamentals). It defined boomers & Gen X as those over 40 years of age, and millennials as those under 40 years of age. Based on an evenly weighted basket of the 11 stocks, investors over 40 would have experienced an average gain of 1.29%, with these stocks comprising a total of 3.8% of the share of their total trades.
This is compared to investors under 40, who would have experienced an average loss of 1.93%, with these stocks comprising 5.14% of their total trades.
This means that the younger and less experienced traders were acting with 2x as much risk, their return was 2.5x worse and lost them money, and they were generally more likely to be duped and trade on the hyped status of these stocks, compared to their older counterparts.
The 11 stocks selected, in order of meme-worthiness, were 88 Energy (88E), Creso Pharma (CPH), Douugh (DOU), Lake Resources (LKE), Brainchip (BRN), Vulcan Energy (VUL), Digital Wine Ventures (DW8), Zip Co (Z1P), Cirralto (CRO), Mesoblast (MSB), and Latin Resources (LRS).
Price variations were analysed over the last 12 months, during which time every one of these stocks experienced a significant uptick in price seemingly driven by social media hype. The highest average return on any one stock for the boomers was Digital Wine Ventures at 8.27%, and the biggest loss was on Vulcan Energy at -11%. For the under 40’s, the biggest average gain was 88 Energy at 26.59%, and the biggest loss was on Latin Resources at -15.67%.
OMG stresses that any individual stock in the analysis was not necessarily a good or a bad investment, rather it appeared that it was the act of trading according to social media “advice” and not according to a responsible and strategic approach to investing that made the difference.
These findings reinforce the risks of investing based on uninformed social media hype while reinforcing the benefits of professional advice and experience, according to OMG.
Ivan Tchourilov, CEO of OMG: “With all the hype around meme stocks, it is no surprise that the younger traders and investors are getting caught up and caught out.
“And considering we are seeing the largest intergenerational transfer of wealth in history, this is a very worrying trend. We would advise caution, and for investors to research, seek professional advice, and gain experience before trying to time the market or make quick gains, especially in meme stocks.
“This opens up a significant need for scalable online advice solutions that can be provided to online investors in the comfort of their own homes by well-informed and experienced advisers, brokers, and fintechs.”
OMG’s analysis process:
OMG searched Reddit, Twitter, and trading-focused Facebook groups to find 11 of the most interesting trending stocks that came with rocketship emojis, the symbol currently being used to indicate “strong buy”, then cross-referenced the stocks with Google Trends to confirm they were genuinely trending.
OMG then took an anonymised population of 600 Opentrader customers to crunch the numbers on exactly when they bought and sold. The split by age was 51% over 40 and 49% under 40.
For more information, please visit: www.openmarkets.group
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Please contact Erika Streegan for any interview requests
Erika@ThirdHemisphere.com.au // 0401 788 399
OMG (Openmarkets Group) (www.openmarkets.group) is an Australian, independent trading and wealth management fintech, providing a full suite of technologies and market infrastructure to investment professionals and connecting consumers with investment and advice.
OMG consists of two enterprises:
Openmarkets is one of Australia's largest independent retail brokers and provides technology solutions across wholesale execution, order and risk management, advice, and CRM, enabling investment professionals to connect to markets and deliver white-labelled services for their customers.
Opentrader is Australia’s most competitive self-directed retail trading platform for professional traders and those who want to trade like a professional; from only $5 per trade.
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