After the Bell: Right-click, left behind - why boomers are losing the investment game

One of my favourite comedians is Ronny Chieng, who is a guest host on The Daily Show, Comedy Central’s late night talk show. Chieng is unusual on the comedy scene for a bunch of reasons, not the least of which is his Asian origins - he was born to a Malaysian-Chinese family and is now almost permanently based in the US. Like so many other stand-up comedians around the world, he is enormously funny. And YouTube has, thankfully, opened up a new kind of celebrity comedy culture which I find a wonderful - and sometimes necessary - distraction.

Chieng has two other distinguishing characteristics: the first is that he is seriously smart, which comes through loud and clear in his comedy routines (he has both a Bachelor of Commerce degree and a Bachelor of Laws degree), so no slouch on the academic front. Second, he just obviously hates baby boomers. 

Well, you know, ‘hate’ is a strong word. But he is young enough to be openly critical, shall we say, about his elders. He has a fabulous sketch on how ridiculously gullible boomers are about online scams. In one segment, he asks: “Has there been a dumber generation of idiots, more susceptible to fake news than these f**king baby boomers literally believing everything they see on the internet?

“You literally have people in Honolulu right now auto-driving their Tesla cyber trucks as they vape out the window and their phone AI is trading cryptocurrency. Meanwhile, you have baby boomers. They can’t even right-click. They can’t even right-click! It’s one button. How do you right-click on one button? It’s scary. They don’t know what’s real any more. 

“Like Ronnie, look, look at this photo of Bigfoot shopping at Whole Foods. Bigfoot is real now. Now look, there’s an image of him buying kombucha at Whole Foods. What technology exists that can fake images? I’m like, mom, that’s not real. Stop sending it around. It’s not real … Just stay off the internet. This world is not for you any more. Stop making decisions.”

Harsh, but does my generation struggle with right-clicking? Damn right they do. BTW, “right-clicking” is the button on the mouse which is, and you won’t believe this, on the right. Thought I would point that out … just in case. 

Generational differences can simply be about the age category in which one finds oneself, with all generations going through similar life patterns. Socrates is meant to have said: “The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders.” Well, that hasn’t changed (see above). 

But while generational differences have always existed, the current rift feels deeper and more visible than in many previous eras. One of the reasons is simply that technological change is happening faster. We’ve gone from landlines to AI in under 30 years. There is now this thing called “epistemic fragmentation”, which means that different generations literally see different realities and people live in their own algorithmic bubbles.

In few places is this more visible than in investing. The World Economic Forum has just done a new report on generational differences in investing, which is fascinating. All I can say is that I hope the professional investing community is ready for this because the change is incredible - both very good and very bad for institutional investors. 

The good news for the industry is that the overall interest and participation of younger generations in investing has skyrocketed. The bad news for the professional industry is that young people are massively doing it for themselves, and their confidence in AI to provide all the help they need is very high. 



The study was done by taking samples in 13 countries, including South Africa, more or less evenly split between the developing and developed world. Younger generations are showing greater interest in investing and sophisticated asset classes than older generations, which I suppose is understandable. But the degree is extraordinary: 58% of Gen Z (the youngest) reported they started learning about investing before entering the workforce, compared with 21% of boomers. Just over 14% said they started learning about investing in primary school.



Younger investors are also much more picky about where they invest: 70% of millennials choose financial institutions based on alignment with their personal values compared with 21% of boomers. And the younger you are, the more likely you are to be trading on your own account. Overall, that proportion is now more than half.



How does SA fit into all of this? Quite neatly, as it happens. Although the total invested is smaller - SA’s citizens are poorer, after all - total capital market participation is more or less the average.  



The big takeaway is this: a new wave of retail investors is hitting the market. At the moment, they are young and are not that significant as a proportion of total funds under management. But that is changing fast; they are getting older and, dare I say, wiser, after all. DM