By Chris Singlemann, Graduate Student
Up until the market’s correction in early February, the world economy was experiencing one of the longest bull markets on record. For all intents and purposes, the past few years have been as good a time as any to invest in the stock market. Yet, only 54% of American households own stocks.
The percentage, down 12% from before the 2008 financial crisis according to a recent Gallup poll, indicates that more wealth is in fewer hands. Sure, the stock market has been strong, but the number of participants is dwindling.
In an effort to spur participation, TD Ameritrade, the Omaha-based brokerage firm, recently introduced its new Twitter chat-bot. While not the first-time banks, or even TD Ameritrade, have introduced chat-bots, it is the first-time users will be able to buy stocks directly from their Twitter account. TD Ameritrade users will be able to log onto their accounts and purchase stocks or ETFs via a direct message with the chat bot. Just like the firm’s Facebook chat-bot introduced in the fall of 2017, non-users can still ask financial questions and check stock prices, but not make purchases.
The feature arrives on the heels of commission-free investing mobile app Robinhood allowing its users to trade cryptocurrencies like Bitcoin. The efforts of Robinhood, TD Ameritrade, and others, share a similar goal of reaching the now largest demographic in the country: millennials. To stimulate investing and contribute to the economy’s growth, the onus falls on those in the financial industry to meet its prospective audience where they are, and TD Ameritrade’s actions on social media are evidence of that.
But it’s not just reaching them that counts. The industry needs to appeal to millennials as well, and growing up during a financial crisis has left the age-group skeptical and wary toward Wall Street. Yet for those very same reasons, emerging media has been perfect for millennials and investing.
New apps like Acorns and Stash allow individuals to invest with spare change and never even physically buying a stock. TD Ameritrade and Bank of America allow social media users to learn more about their finances by talking to chat bots any time of the day or night. The barriers to entry for millennials and the stock market have been broken down by emerging media. Only time will tell if it is enough to boost participation in the stock market.