Young adults are increasingly using both online dating and investment platforms and the Financial Conduct Authority (FCA) is urging young people to apply the same principles to investing as they do to finding a long term partner.
Short term gain for long term pain
As part of its InvestSmart campaign, FCA is exploring ways to encourage better investment decisions, as its research showed that young investors take a more long term approach when dating than investing.
Fewer than a third (31%) invested to generate greater returns than a savings account, while almost half (48%) invested time into dating to find a life partner.
Investment horizons are very short, with only 2% viewing a period of more than 5 years, while 14% having no timeframe at all.
Yet investing with long term goals in mind may avoid fashionable choices and smooth out market volatility.
We want to help investors rethink their approach by spotting the similarities to their own dating lives and applying the same mindset, thinking of the long-term, doing their research and prioritising values that match theirs
Lucy Castledine, FCA
Don’t believe (all) the hype
Social media is also far more influential among this group when making investment decisions than in the choice of a partner.
More than half view a date’s social media to prepare for a date (57%), though one third (33%) said they were able to ignore hype on a social profile. However, only one in five (20%) said they were able to discount hype around investments.
Lucy Castledine, director, consumer investments at the FCA said: “It can be an emotional rollercoaster, you’re trying to spot the red flags and hope the expectation lives up to the reality – and that’s just when investing.
“Our research shows young investors are putting more thought into their dating than their investing lives. Over the past year, we have seen the temptation of high-risk investments increase as consumers balance stretched household finances against the immediate thrill of a quick return. But this may mean investors are ignoring the red flags.
“We want to help investors rethink their approach by spotting the similarities to their own dating lives and applying the same mindset, thinking of the long-term, doing their research and prioritising values that match theirs.
“We hope this will encourage a more mindful, confident approach to investing in the future.”
