By Paul Nixon, Head of Behavioural Finance, Momentum Investments SA 

If you have been “ghosted” or took some time out for a “glow up” to work on your spirituality, chances are you were born near the turn of the century. You are part of Generation Z or a “Zoomer” (aged 10 – 25). Zoomers, have faced challenging formative years that have undoubtedly shaped their attitudes and outlook. Understanding Zoomers will be key for financial services providers who will compete for their wealth as they enter the economy, but also as they inherit wealth from Boomers (aged 58-76) and Gen Xers (aged 42-57).

Investing is personal and understanding Zoomers to help them invest more in their future is important. Research conducted recently by the Momentum Investments’ Research Hive into the trading behaviour of Zoomers largely confirmed the trends I list below.

Gen-Z: Key characteristics


Four distinct characteristics arguably define Gen Z:

  1. Contrary to popular belief, they are financially minded. Zoomers have witnessed their parents getting hit hard in the pocket by the Global Financial Crisis of 2008. And after over a decade of sluggish economic recovery, again by the COVID pandemic. Zoomers value security, but not the same way their parents did. They have less trust in politicians and the financial system and their investment habits show this clearly. For example, Zoomers are more likely to buy cryptocurrency than stocks[1]
  2. From “digital pioneers” to “digital natives”. Zoomers were born into a world of social media and ubiquitous information. Technology and a connection to the internet is everywhere. Financial services providers will need a slick digital offering as a “ticket to the game” and this is no longer a differentiator. Furthermore 38% have indicated an interest in buying non-fungible tokens (NFTs).
  3. They are shrewd consumers. Zoomers are not watching ads or listening to celebrity endorsements. In fact, they are 50% more likely to take financial advice from social media. They are also more likely to take some time before making a decision and value real-life experiences from people they trust.
  4. Living in and for the now. Although politically progressive and concerned about the future, they tend to live in the now. A 2020 NerdWallet survey revealed that 72% of Zoomers have yet to start saving towards retirement. Zoomers are more interested in investments that provide shorter term security and are available should the need arise.

Understanding the Gen-Z ‘disposition’ effect

Our own 2022 research[2], covering over 10,000 investors, shows that Zoomers comprise a fraction of the execution-only trading accounts (approximately 5%) and are also surprisingly loss-averse given their youthful disposition.


Zoomers were 1.73 times more likely to cash in (realise gains) a winning position in 2020. This worsened to 2.42 times in 2021 as uncertainty amidst the pandemic heightened.

This is known as the “disposition effect”, where realising a loss (trading in a losing position) is painful and so the trader avoids it.

The behaviour is therefore that the trader becomes overly likely to cash in a winning position as they become regret-averse (fearful of the winning position reversing). This is a useful insight in engaging with Zoomers to assist them in managing their behaviour.


The predominant emotion that Zoomers associate with their finances is anxiety.

The greatest challenge for this generation may just be fighting their impulses and falling prey to their biases (like the disposition effect).

Getting the basics right like budgeting and rigorously using the 50/20/30 rule of budgeting (notably the 20% savings portion in the middle) will assist in reducing the anxiety experienced around finances.


However, financial services providers will need to help Zoomers by providing investment vehicles that matter to them wrapped up in a slick digital experience that are referred to them by people that matter.


[2] 10,000 clients and R9 billion in trades from 2016 to 2021 on the Momentum Securities trading platform in South Africa.


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