It looks like young Canadians are diving headfirst into the world of crypto. A recent report from the Canadian Securities Administrator shows that a good chunk of these investors are managing their own portfolios and getting their info from social media. Let’s break down what’s going on, the risks involved, and what this means for the future.

The Canadian Investor Index Report

The CSA’s 7th Investor Index was published in June 2024 and surveyed over 7,200 Canadians. One of the more shocking stats? 27% of those surveyed don’t have any savings or investments for the future. For those who do invest, mutual funds (53%), term deposits or GICs (42%), and individual stocks (38%) were the most common holdings.

DIY Investing is All the Rage

One of the biggest takeaways from the report is that nearly half of Canadian investors are opting for a DIY approach. 45% of investors have a self-directed account, with 30% of those accounts opened in just the last two years. Seems like people want more control over their money.

Social Media: The New Investment Guru?

53% of investors are using social media to get their investment info, which is a huge jump from 2020. For those aged 18 to 24, that number skyrockets to 82%. The platforms? YouTube (29%), Facebook (24%), Instagram (17%), TikTok (13%), and Reddit (12%).

But here’s the kicker: most “finfluencers” don’t have any formal financial education. They might be more interested in getting commissions than actually helping you make money. So tread carefully.

Crypto is Hot Among Young Investors

Crypto is especially popular with younger folks. The report found that 33% of investors under 25 hold crypto assets, while only 4% of those aged 65 and over do. This shows that younger generations are more open to unconventional investments.

The Good, The Bad, and The Ugly of Crypto

Investing in crypto can be a wild ride. On one hand, you’ve got the potential for high returns and diversification. On the other hand, it’s super volatile and can swing wildly in price. There are also security risks like hacking and losing your funds. And let’s not forget about the murky regulatory environment.

Crypto vs Traditional Investments

When you stack crypto up against traditional investments like stocks and mutual funds, they both have their pros and cons. Traditional investments are generally more stable and come with established rules. Cryptos can be more speculative but also offer a chance for massive gains.

Summary: Do Your Homework

For young Canadian investors looking at crypto as a way to invest, it’s crucial to do your homework. Make sure to check out any influencers or advisors you’re thinking about following—do they know what they’re talking about? And whatever you do, don’t make decisions based on FOMO or what your friends are doing.

In short, self-directed accounts and crypto are becoming more popular among young Canadian investors. By staying informed and cautious, you can take advantage of this ever-changing market without getting burned.

The author does not own or have any interest in the securities discussed in the article.