What should millennials invest in — stocks or cryptocurrency?

What should millennials invest in  — stocks or cryptocurrency? (PHOTO: Getty Commercial)
What should millennials invest in — stocks or cryptocurrency? (PHOTO: Getty Commercial) · hobo_018 via Getty Images

SINGAPORE — Stocks may be the most well-known and simplest type of investment, but cryptocurrency seems to be the next big thing in recent years too. What then, should millennials choose to invest in — stocks or cryptocurrency? And is there a better option?

This is part of a series where Yahoo Finance Singapore will focus on different aspects of millennials and their finances. In this first part, we discover whether it’s better for millennials to invest in stocks or cryptocurrency.

Diversification as the baseline

First things first, it is important to know what you are dabbling in. Investing in stocks can include a variety of investment instruments such as exchange-traded funds, index funds, government bonds, futures, warrants, and commodities trading. They are usually done through investing a small sum of money every month.

Meanwhile, cryptocurrencies are digital assets that people can use as investments or for online purchases. How it works is basically exchanging real currency to buy “coins” or “tokens” of a certain kind of cryptocurrency.

Hence, the short answer to whether stocks or cryptocurrency is a better investment is that it depends on what your financial needs and wants are. In fact, the financial experts that Yahoo Finance Singapore spoke to advised that millennials should actually invest in both stocks and cryptocurrency.

“Ultimately, your financial portfolio should be diversified and you can always choose to invest in both of stocks and crypto because they serve different functions,” said Catherine Seah, 22, a student financial advisor.

Echoing a similar tune, Asheesh Chanda, CEO of Kristal.AI, a digital-first private wealth platform in Singapore, said: “Investing should be seen as being a variety of modes of transport for people to reach their goals. Each mode offers certain benefits and incurs certain costs.”

For example, if you can only afford to invest a small sum every month, then investing in stocks is the way to go as it is low-cost and an effective way of accessing markets. Otherwise, if you are more risk-taking, then cryptocurrency might be a better option for long-term gain.

Stocks as the safer option?

Yet, it seems that most millennials are still leaning towards investing in stocks given without dabbling much in cryptocurrency.

According to brokerage firm Tiger Brokers, 45% of their Gen Z investors prefer long-term stocks like Apple, Boeing, and Carnival. Other data from an OCBC Financial Wellness Survey also find that about every four in 10 millennials who invest admitted that they speculated excessively in the hope of making a quick buck.