Inflation Drives Need For Stability & Young Investors Are Betting On Alternative Investments

8 months ago - February 03, 2022
alternative investments
alternative investments
Over 70% of 18-40 year old investors worry about inflation, with over 50% positioning for alts and 74% looking into more real estate allocations in 2022

Millennial and Gen-Z investors are overwhelmingly steering their individual portfolios toward alternative investments in order to stave off the volatility of inflation, according to findings from a new survey published today by Fundrise. Over 50% of respondents said they are planning to increase their allocation to alternative investments, with 74% of 18-40 year-olds surveyed expecting to invest or explore investing in real estate via online investment platforms in 2022.

Fundrise, the country's largest direct-to-investor real estate investment platform, partnered with DKC Analytics to survey 1,000 Millennial (25-40 years-old) and Gen Z (18-24 years-old) investors in late December to gauge investor sentiment and outlook for 2022. For nearly 70% of these younger investors, inflation is a top financial concern. And in their search for a hedge, the survey found that 77% currently invest in the stock market via online platforms or apps, and 66% of respondents are actively investing in alternative platforms, including real estate, venture, and cryptocurrency.

Inflation has been rising at its fastest rate since 1982, which is reason enough to cause some investors to worry. In December, the consumer-price index rose 7%, and is the third consecutive month that inflation surpassed 6%, according to recent findings from the U.S. Bureau of Labor Statistics.

"Real estate has always been one of the most attractive asset classes for professional investors, but doubly so in inflationary times," said Fundrise Co-Founder and CEO Ben Miller. "What's extraordinary this time around is that millions of Millennial and Gen Z investors are using tech-enabled platforms like Fundrise to actually lead the push into the hottest alternative assets on the market (like single-family housing), diversifying beyond stocks and bonds to an extent that was impossible for previous generations. It's hard to overstate how impactful this could be decades from now."

2022 Concerns

  • Nearly 70% of surveyed investors rate inflation as their top concern for financial markets.
  • The potential of another Covid-19 shutdown (65%), global market uncertainty (64%) and issues springing from the supply chain (65%) were listed as the next top three concerns going forward.

Stability

*Crypto increasingly seen as a safe investment *

  • Cryptocurrency is viewed as the most stable investment option by these investors
  • Nearly one-quarter of investors surveyed say cryptocurrency is a safe and stable bet for their money, which served as the most popular response amongst participants.
  • Real estate investment funds, mutual funds, 401k's and fixed-income were all given the same weight (11%) as stable investment options by the participants surveyed.

*Investment Learning *

*There's a thirst for knowledge amongst the investors surveyed. *

  • Approximately 95% would like to learn more about at least one major type of investment vehicle and have already taken steps to do so.
  • Nearly 40% say they would like to learn more about real estate investment funds, mutual funds, NFT's, and other investment options.
  • Approximately half responded that they have learned about investment strategy by discussing it with friends and family (49%) or learned about the markets from their own online research (51%).
  • Nearly 42% have even ventured towards taking online courses, and 40% played the stock market game to hone their skills.

About The Survey

This survey was conducted online within the United States by DKC Analytics on behalf of Fundrise from December 17 to December 20, 2021, among 1000 respondents that are representative of a sample of Gen Z (30% / 18-24) and Millennial (70%/25-40) generation investors. Results are weighted to be representative of this population, which was found at random per scientific sampling. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. The margin of error is 3.1%.

About Fundrise

Fundrise is America's largest direct-to-investor real estate investment platform. Since 2012, it mission has been to use technology to build a better financial system for the individual. We make it easier and more efficient than ever for anyone to invest in institutional-quality private real estate—all at the touch of a button. To date, it transacted approximately $7 billion worth of real estate, and currently manage approximately $2.4 billion in equity, on behalf of our more than 210,000 active investors and 1.2MM active users.

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