Millennials, Gen Z Most Likely to Jump at New Investment Trends

Crypto, prediction markets, meme stocks, oh my. 

In recent years, investors have been inundated with risky but attractive trends. While plenty of them may have long-term investment potential when paired with a disciplined approach, others can disappear just as quickly as they emerge. (Remember NFTs?) New research finds that younger investors are considerably more willing to take on the risks associated with market innovations than their older counterparts.  

While just 8% of US-based investors overall describe themselves as “first movers” when it comes to new and emerging investment trends, that figure jumps to 15% for Gen Z and 12% for millennials, according to Northwestern Mutual’s 2026 Planning & Progress Study. 

“Younger adults are coming of age in an environment where change is constant and opportunities arise quickly,” John Roberts, chief field officer at Northwestern Mutual, said in a statement.

Risky Business  

Age alone doesn’t determine risk tolerance, but it can play a major role in how an investor’s risk capacity interacts with their risk literacy. Risk capacity is how much risk your life can absorb, and 25-year-olds have more of it than they’re likely to ever have again, thanks to decades of paychecks ahead and a long time for markets to recover from any downturns, said Matthew Chancey of Tax Alpha Companies. Risk literacy, on the other hand, is knowing what risk feels like, and that comes from living through cycles. 

“Young investors have maximum capacity and minimum literacy,” Chancey said. “Older investors are the exact reverse.” 

But with younger clients, a financial advisor’s job isn’t to talk them out of every new investment idea or emerging trend, said Jacob Cuthbert of Educo Advisor Group: 

• “Curiosity can be a good thing,” Cuthbert said. “Our job is to help them understand what they own, why they own it, what role it plays in their financial plan and what could happen if the investment doesn’t work out as expected.” 
• Speculative investing should be kept to under 5% of your portfolio, said Kassi Fetters, founder of Artica Financial Services. “Clients should have the autonomy to invest in new opportunities or products if they want to,” she added. “However, it’s important that the majority of a client’s investing that is for retirement is done in proven diversified investments that have a track record.” 

Buyer’s Remorse? It’s also important to remember that by the time retail investors are excited about an investment, the pros may have a leg up and the masses may already be buying. “By the time a trend has an app, ‘first’ is a feeling, not a position,” Chancey said.