As goes Silicon Valley, so goes millennials’ money.
The top five holdings for young adults are all tech stocks, and none are dividend-yielding stocks sought by the general investing population, according to a report from TD Ameritrade.
Millennials’ top stock, Apple, is the world’s most valuable company, reaching a market capitalization of more than $800 billion in May. Apple is followed by Facebook, which has a market capitalization of nearly $453 billion, and Amazon, which traded at nearly $997 per share on Monday.
Young investors’ No. 4 pick, Tesla, doesn’t crack the top 10 list for the general population, said Steve Quirk, executive vice president of TD Ameritrade’s Trader Group.
Quirk says these investing preferences make sense as long-term strategies for young adults with many years to invest ahead of them.
“Most of them are very interested in technology, but the biggest difference would be the dividend-yielding stocks,” Quirk said on CNBC’s “Closing Bell” Monday.
Three of the top 10 companies bought by TD Ameritrade’s overall clientele are dividend-paying stocks, Quirk said, but none of millennials’ top 10 stocks pay dividends.
The difference “isn’t a real surprise when you think about the amount of time they have to invest and how they want to be a little more aggressive in their stance,” Quirk said, “whereas in the general population, their duration of investment’s a little shorter, so they’re interested in the income.”
Among millennials’ top-five stocks, Netflix has seen the largest increase over the last year. Netflix traded at $152.67 on Monday, more than 61 percent above its price one year ago.
Millennials are also more than twice as likely as other generations to make trades with their phones or tablets. Quirk said 46 percent of millennials make their trades on mobile devices on an average day, compared with 22 percent of overall trades.
Overall, millennials appear to be trading based on what they know. “If I trade Snap, 75 percent of the people who trade Snap also trade Facebook and they trade Twitter. So they all trade the same” social media stocks, Quirk said.