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Updated August 28, 2023

decoding gen z's investment mindset + when your new job keeps hitting snooze

decoding gen z's investment mindset + when your new job keeps hitting snooze

decoding gen z's investment mindset + when your new job keeps hitting snooze

AJ Giannone, CFA

Adam Damko, CFA

The Piggy Bank


📈 The market ended its three-week losing streak this week, finishing modestly higher thanks to a late Friday rally.

💼Economic News

At the Jackson Hole Symposium, Fed Chair Jerome Powell stated inflation is still “too high” and stressed the central bank is committed to raising rates if necessary. While inflation has cooled fairly consistently for months, it’s still sitting at 3.2% as of July, above the Fed’s 2% target.

Speaking of high rates, the 1-Year Treasury yield — or the rate the US government pays to borrow money — hit 4.35% last week. This is the highest it has been in 16 years.

Finally, as mortgage rates continue to climb, demand for mortgages hit a 28-year low. At last reading, the average 30-year fixed-rate mortgage clocked in at 7.31%, the highest level since December 2000.

👀 What to Be on the Lookout for This Week

There are plenty of economic reports to be on the lookout for this week, including:

  • Case Shiller Home Price Index  

  • JOLTs job openings

  • GDP growth rate

  • 30-year fixed-rate mortgage

  • Core PCE price index

  • Nonfarm payrolls

  • Unemployment rate

  • PMI

  • Hourly earnings

 And, for earnings, a number of major companies are scheduled to hand in report cards this week, including:

  • Best Buy

  • HP

  • Ambarella

  • Crowdstrike

  • Five Below

  • Chewy

  • Salesforce

  • Dollar General

  • Lululemon

  • Dell

  • Broadcom

📰 In Other News

The US is currently experiencing a Tale of Two Work Cultures, as employers take different stances on remote work.

On “Team Remote” sits companies like Airbnb, Dropbox, GitLab, and Shopify. Meanwhile, “Team Office” consists of companies like Goldman Sachs, Amazon, Tesla, and Meta Platforms.

Companies pushing for in-office work believe it will lead to high productivity and more innovation. However, companies offering remote work have been hiring at twice the rate of those with full-time in-office requirements. 

Either way, it looks like remote work is here to stay. In June, ZipRecruiter’s chief economist Julia Pollak called WFH a “permanent shift.” With this in mind, the future of work may not be fully remote, but it clearly won’t be back to business as usual either. More likely, the two extremes will eventually meet in the middle.

Meanwhile, in a major win for DIY enthusiasts, Apple supported California’s Right to Repair law this past week. If passed, this consumer electronics law would make it easier for handy consumers to fix their own electronics. The law would require manufacturers to make parts and manuals available to repair shops and consumers. As one of the world’s biggest providers of electronics, Apple’s support will go a long way toward pushing this bill through.

The retail sector took a hit this week, with the slowdown mainly attributed to poor earnings reports from Dick’s Sporting Goods and Macy’s. Both retailers reported a similar problem: customers aren’t paying for goods. For Dick’s, this meant a spike in shoplifting. For Macy’s, this meant a rise in credit card delinquencies.

Finally, there were two major mergers this week. First, Roark Capital bought sandwich giant Subway for an estimated $9.6 billion. Second, the Chinese fast-fashion ecommerce company Shein joined forces with American retailer Forever 21. 

Reflects performance at market close 8/25/23


🔮 Decoding Gen Z's Investment Mindset

Unique Circumstances

More than other generations, the eldest members of Gen Z have seen remarkable changes in a few short years of adulthood.

Born between 1997 and 2012, members of Gen Z fall between 9 and 24 years old. The eldest of this generation completed high school and graduated college, all in the middle of the pandemic. COVID set the stage for an economic rollercoaster — but for Gen Z, the uncertainty may be the norm.

Between 2020 and today, here’s a few of the economic twists and turns Gen Z has witnessed:

With all this turbulence, Gen Z is likely to have a different outlook toward personal finance than their grandparents, parents, or even older siblings.

  • A pandemic that ground the economy to a halt overnight.

  • Rock-bottom interest rates that set off a tremendous stock market rally.

  • Asset bubbles triggered by meme stocks, cryptocurrencies, and NFTs.

  • The highest inflationary period in decades.

  • The fastest interest rate hikes in decades.

  • The emergence of artificial intelligence.

The Gen Z Investment Mentality

To better understand this young generation of investors, US Bank surveyed 4,000 members of Gen Z. They have three takeaways.

First, wealth was defined as a better quality of life, rather than a higher quantity of money, by 40% of respondents. Having the resources to explore personal interests and new experiences strongly influences their investment choices.

Next, the survey found members of Gen Z to be on the cautious side. Despite growing up with the internet, about 75% of Gen Z lack investment knowledge. The internet, while informative, also hosts scams and misinformation. This makes it hard for young investors to discern solid advice from scams. (Check out Allio Academy for investment information written by actual experts.)

Finally, the standout statistic from the survey was that an impressive 85% of Gen Z investors would accept a return lower than recent averages in the S&P 500 — provided their investment aligned with their values. In comparison with their grandparents' generation — the Boomers — 35% said they would not invest if the return was low, even if it matched their beliefs. (Did you know that Allio has Impact Funds so you can align your investments with your values?)

Molding the Future

The average Gen Z investor puts quality of life above all else and is passionate about sticking to their beliefs, even if it means lower returns.

The majority of Gen Z is still figuring out the basics of investing. But the good news is that nearly two-thirds of young investors said they trusted financial advisors — much higher than previous generations.

While Gen Z may still have much to learn about money management, they will probably seek guidance from qualified professionals... along with YouTube and TikTok.

⏰ Employment Limbo: When Your New Job Keeps Hitting Snooze

Unexpected Gap Year

Many young graduates of the Class of 2023 have found themselves in a bind. From classes to internships, the degree, then the job offer — they've ticked off all the boxes. But still they face a dilemma: when do they start?

Management consultancies like Deloitte, KPMG, Boston Consulting Group, and McKinsey hire thousands of new recruits annually — until this year. Now, the pandemic boom has started to wear off, forcing them to make trade-offs. 

Among the trade-offs they've made is to push back starting dates for new employees. Many of the new hires won’t need to come to the office — either physically or virtually — until 2024.

Last fall, the aspiring young consultants were due to start their new jobs after graduating in spring. But with multiple push backs in the start date, they're now faced with an unexpected gap year.

Treading Water

How these young professionals spend their gap year depends on their situation.

For graduates living at home with few expenses, this gap year is ideal for travel, hobbies, or part-time work. But some moved to new cities after accepting last year's job offers and now find themselves in a dilemma. They've signed leases in expensive cities like New York and Los Angeles, and rent will be due well before their first paycheck.

When they finally start in 2024, these graduates will be a year behind their peers. Moreover, when it's time for promotions or renegotiation— this lag could hold them back down the road.

Cutting Back

The repeated delays are part of a larger, industry-wide pushback. Management consultancy firms like KPMG and McKinsey thrived during the pandemic. As businesses and governments looked for advice and strategies during the global shutdown, consultancy firms boomed.

To keep up with the flood of new business, they rushed to expand. Now, the situation has reversed — firms are cutting costs, starting with downsizing. According to Source Global Research — a market research firm — businesses are cutting costs by delaying new recruits and pausing consulting projects. 

Still, even as layoffs were announced, many firms say they are reluctant to skim off too much, in case business rebounds. While McKinsey, Deloitte, KPMG, and Ernst & Young announced cutbacks earlier this year, they’re also still committed to honoring offers extended to new hires.

Despite temporary setbacks, this story could have a happy ending for many graduates. Most consulting firms have paid thousands of dollars in stipends to help their new hires make ends meet. KPMG has reportedly doled out $10,000 to bridge the gap. Similarly, Deloitte committed up to $2,000 per month until they start.

 The thought of waiting until 2024 might seem unimaginable to these young graduates. But, in hindsight, they’ll likely reminisce on the days of having a job offer in hand, a steady income, and nothing but free time.


Job seekers’ reservation wage — the lowest offer they’d accept for a new job — hit a record-high $78,645 in July. This 8% year-over-year spike in pay expectations is the result of steadily increasing prices.

Despite economic concerns, Americans aren’t shying away from purchasing brand-name clothing, handbags, or jewelry. However, many shoppers are still opting for used goods in fair condition over brand new items.

US malls are making a comeback after adapting to competition from ecommerce. A report by Coresight determined foot traffic in top-tier malls was up 12% in 2022 compared to 2019.

Consumers will soon be unable to buy a new car for under $20,000. This comes after reports Mitsubishi will discontinue its compact Mirage sedan in 2025.

Lawmakers are considering raising the $600 reporting threshold for using payment apps like Venmo or PayPal. Some legislators want to revert the reporting thresholds back to the 2022 level of $20,000.

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