- Young people are planning to put half of any forthcoming stimulus checks directly into equities, Deutsche Bank Research shows.
- The figure was slightly lower for 18 to 24-year-olds at 40%.
- Recipients of stimulus checks across all age groups combined could pour as much as $US170 ($222) billion into stocks.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell
Young people are planning to put roughly half of any forthcoming stimulus checks directly into equities, according to a survey from Deutsche Bank.
The online survey of 430 respondents found that half of Americans 25 to 34-years old are planning to spend 50% of their stimulus checks on stocks. The figure was slightly lower for 18 to 24-year-olds at 40%.
Older respondents meanwhile said they will put less into equities with 35 to 54-year-olds saying they will invest 37% and those over-55 years old at only 16%.
Combined, the age groups plan to allocate 37% of forthcoming stimulus to the stock market, which the German bank estimates could represent a $US170 ($222) billion inflow.
The report surveyed respondents from February 5-9 and was published on February 24. It was authored by Deutsche Bank strategists Binky Chadha, Srineel Jalagani, and Parag Thatte.
The survey also revealed a surge in younger retail investors. Nearly half of the respondents said they were investing for the first time over the past year, with 61% being under 34 years old.
The new investors, the survey also reveals, are more aggressive, as seen in the spike in the number of people employing some form of borrowing or leverage (26%) compared to those who had been investing for one to two years (9%) or longer (3%). They also trade options more frequently, with half trading more than 10 times a month.
A range of factors is driving respondents to stocks. Nearly half (42%) said it was a good return on investment, while 35% said it was about having more cash on hand to invest. Meanwhile, 38% admitted they had more time to research and trade, which goes hand in hand with the 35% who admitted to the ease of trading at home.
No-fee trading attracted 28% of those surveyed as well.
The Senate on Sunday approved a $US1.9 ($2) trillion stimulus bill, set to be among the largest in American history, after a marathon series of votes. The package, which heads back to the House for final approval, is meant to help the millions of Americas who have suffered financial setbacks brought about by the pandemic.