A rising trend among young investors is the concept of vibe investing, where emotional instincts and personal experiences influence investment decisions rather than traditional research-based strategies. Saul Oster, a 20-year-old University of British Columbia student new to the stock market, embraces vibe investing for its potential for passive income and ease of generating money without extensive effort.
Oster and his peers, part of a growing cohort deviating from conventional trading practices, often rely on gut feelings and life experiences to guide their investment choices. An Ipsos poll conducted for CIBC’s Investor’s Edge revealed that 34% of Gen Z respondents find financial advice from older generations irrelevant due to evolving markets, new financial tools, and shifting priorities.
The allure of vibe investing lies in its perceived success rate based on intuition. Oster shared a profitable venture in Canadian mining companies driven by the belief that energy would surge. Instead of extensive research, he and his friends trust their instincts when making investment moves.
Many, like Liz Enriquez, a personal finance mentor, emphasize the emotional aspect of financial decisions, noting that technology has democratized investing, making it more accessible and less exclusive. Furthermore, young investors are motivated by the fear of financial stagnation, viewing investing as a crucial pathway to financial progress.
While vibe investing can yield initial success, experts like Andrew Aziz caution against relying solely on emotions. Aziz advises aspiring investors to educate themselves, start early, and diversify their portfolios to mitigate risks. He warns against following influencers blindly, highlighting the importance of thorough research and avoiding speculative investments.
As young investors embark on their financial journeys, the emphasis is on progressively allocating earnings towards investments to leverage the benefits of compounding interest. While risks are inherent in investing, the learning experience that comes with losses is considered a valuable aspect of the journey towards financial growth.