Positive Comments: Generation Z Enters the Scene to Reshape the Investment Ecosystem and Accelerate the Iteration of Financial Cognition
The influx of Generation Z (those born after 1995 and 2000) as the main force of new stock investors is reshaping the investment ecosystem of the Chinese financial market with their “youthful” power. The entry of this group not only breaks the solidification of the traditional investor structure but also promotes the iterative upgrade of the mutual cognition between the market and investors through their unique information acquisition methods and trial – and – error growth paths.
First of all, the participation of Generation Z significantly optimizes the investor structure and injects fresh vitality into the market. According to data from Ping An Securities and Hurun Research Institute, the proportion of investors under 30 years old jumped from less than 15% in 2024 to 30% in 2025. This structural change is of far – reaching significance. The traditional A – share market has long been dominated by retail investors with institutional investors playing a supplementary role. Among retail investors, middle – aged and older investors are the mainstay, and their investment logic relies more on experience inheritance or short – term gambling. Generation Z, with their innate Internet genes, are better at using diverse information tools (such as quantitative models and policy document research) and are more sensitive to emerging industries (such as AI hardware and new energy). For example, Ran Ran applied the CAPM model and Python code to the analysis of pharmaceutical stocks, and Li Yan adjusted his positions through policy hedging thinking. Although these actions still seem immature, they have shown a “scientific” attempt different from the previous generation of retail investors. The collision of such generational differences objectively promotes the transition of the market investment logic from “news – driven” to “research – driven” and injects new factors of rational analysis into the market.
Secondly, the trial – and – error and growth of Generation Z force the upgrade of information channels and investment education. In the news, Xiao Li evolved from relying on traditional media to being vigilant about stock – recommending on new media, and Xiao Zeng moved from believing in the “myths” on forums to self – review, which reflects the cognitive evolution of young investors in information screening. Data shows that only 6% of Generation Z investors rely on social media such as Douyin and Xiaohongshu to obtain information. This proportion is much lower than expected, which indirectly confirms their cautious attitude towards information after being “harvested as leeks”. This change is reshaping the market information ecosystem: on the one hand, false stock – recommending and the so – called “stock – trading scriptures” based on survivor bias are gradually losing the market due to the vigilance of the young group; on the other hand, the demand for “hardcore information” such as professional research reports, policy documents, and academic models is increasing, which promotes financial institutions and education platforms to optimize content supply. For example, Ran Ran joined a financial club to learn institutional thinking, and Li Yan compiled an “error list” to summarize investment logic. In essence, these actions are manifestations of young investors actively seeking “cognitive upgrade”, and the market is responding to this demand – the investment education content of securities companies has shifted from “K – line introduction” to “macro – policy interpretation”, and the lecture topics of university financial clubs have extended from “technical analysis” to “risk hedging”, forming a positive cycle of “investor demand – market supply”.
Finally, the “real – money growth lessons” of Generation Z promote the overall improvement of the national financial literacy. From the arrogance of the “Wolf of Wall Street” to the epiphany that “theory cannot defeat macro variables”, from the fanaticism of the “limit – up and limit – down myth” to the sober realization that “the K – line chart reveals human nature”, behind these individual stories is the young group’s gradual understanding of the essence of the financial market. The theories of “overconfidence trap” and “loss aversion” in behavioral finance are concretely verified in their practice, and investment principles such as “timely stop – loss”, “hedging thinking”, and “long – termism” are internalized as behavioral guidelines through real losses and profits. More importantly, this growth is not limited to the investment field. Xiao Zeng incorporated the lesson of “academic rigor” back into his research, Ran Ran realized that “there is no standard answer for investment and life” after crossing over from a medical student to the financial field, and Li Yan used the metaphor of “carrying an umbrella in different weather” to describe market uncertainty. These cognitive migrations are enabling the younger generation to face risks and choices in life more rationally. The improvement of financial literacy is essentially the improvement of the ability to deal with “uncertainty”, and the practice of Generation Z provides a vivid sample of “growing from trial – and – error” for a wider social group.
Negative Comments: Hidden Worries behind the Craze – Three Challenges in Generation Z’s Investment
Although the entry of Generation Z has brought positive changes to the market, the problems exposed in their investment behavior are also worthy of vigilance. From the cases in the news, young investors generally face three challenges: “lagging risk awareness”, “insufficient information screening ability”, and “imbalance in life”, which may have a negative impact on individual financial security, market stability, and even inter – generational financial trust if not handled properly.
Firstly, the lagging risk awareness and the widespread “overconfidence trap” lead young investors to easily fall into the cycle of “high – volatility losses”. The questionnaire shows that 72% of Generation Z have only been exposed to stocks for about one year. The core contradiction lies in the mismatch between the lack of investment experience and “knowledge reserve”. For example, Xiao Li, who holds multiple financial certificates, still suffered losses in actual trading. In essence, he equated “exam knowledge” with “investment ability”. Xiao Zeng fell into “overconfidence” due to a 58% monthly return rate and finally suffered a – 59% loss, which is a typical manifestation of the “self – attribution bias” in behavioral finance – attributing profits to ability and losses to external factors. More dangerously, some young investors have turned “stock – trading” into a “speculative game”. Xiao Zeng gave up academic rigor in pursuit of the “limit – up and limit – down myth”, and Li Yan’s initial recklessness of “going to the battlefield with a toy gun” both reflect their underestimation of market risks. The combination of this “cognitive inflation” and “experience vacuum” makes them lack basic risk – hedging tools and stop – loss discipline when facing sudden changes in macro – policies (such as pharmaceutical procurement reforms) or individual stock black swan events (such as rumors of over – capacity), and ultimately become the “cost – bearers” of market fluctuations.
Secondly, the interference of information cocoons and false stock – recommending exacerbates the cognitive biases of young investors. Although only 6% of Generation Z rely on social media to obtain information, cases in the news such as being “harvested as leeks by so – called ‘big shots in the circle'” and “screenshots of making tens of thousands of yuan a day on Xiaohongshu” show that some young investors still have not completely got rid of the inertia of “information dependence”. More subtly, there is the “information cocoon” effect: young people are used to obtaining information through algorithmic recommendations, which may lead to the content they access being limited to areas that “match their own cognition”. For example, they prefer “myths of consecutive limit – up stocks” and “the theory of the invincibility of technical indicators” and deliberately avoid content such as “risk warnings” and “macro – analysis”. This one – sidedness in information acquisition will strengthen their illusion that “the market is predictable” and “they can beat the market”, further magnifying the irrationality of their investment behavior. For example, Xiao Zeng chased after rising stocks and sold falling ones because of the “myth of buying at rock – bottom prices” in hot forum posts, which is essentially falling into the false consensus in the “information cocoon”. Ran Ran’s accidental profit after following the trend to buy consumer electronics stocks may further strengthen her wrong attribution of “random success” and hinder her from establishing a systematic investment logic.
Thirdly, the contradiction between emotional fluctuations and life balance may affect the long – term development of the young group. The “instant feedback” characteristic of stock investment (such as the red and green fluctuations on the time – sharing chart) combined with the “highly sensitive and highly interactive” personality traits of Generation Z easily leads to emotional overload. Xiao Zeng’s anxiety with “fingers shaking on the keyboard”, Xiao Li’s suffering from “mid – night anxiety”, and Ran Ran’s bitterness of “not being able to afford instant noodles” all reveal the severe impact of investment behavior on emotions. More importantly, this emotional fluctuation may penetrate into core areas such as academic studies and career development. Xiao Zeng “forgot all about the ‘academic rigor’ told by his tutor” because of his obsession with the stock market, and Xiao Li was in a state of imbalance due to the conflict between stock – watching and academic studies. These cases warn us that if young investors cannot balance the relationship between “investment” and “growth”, they may sacrifice long – term development opportunities due to the temptation of short – term gains. After all, for Generation Z, who are still in the critical period of knowledge accumulation and ability improvement, the priority of “human capital investment” should be much higher than “financial capital speculation”.
Advice for Entrepreneurs: Growth Insights from Generation Z’s Investment Practice
Generation Z’s stock investment practice is essentially a “game between cognition and risk”. For entrepreneurs, although the scenarios of entrepreneurship and stock – trading are different, the underlying logic – how to anchor the direction in uncertainty, how to iterate cognition through trial – and – error, and how to maintain independent judgment in the information flood – is highly similar. Combining the cases in the news, entrepreneurs can optimize their growth paths from the following three aspects:
First, build an iterative closed – loop of “cognition – practice – reflection” to avoid the “overconfidence trap”. Xiao Li’s lesson shows that “certificate knowledge” does not equal “practical ability”, and entrepreneurs also need to be vigilant about “theoretical conceit”. It is recommended that entrepreneurs verify the business model through small – scale pilots (such as the minimum viable product) before launching a project and collect user feedback in practice; during the project promotion, regularly review whether “success is accidental and failure is inevitable”, and avoid attributing short – term achievements to ability and setbacks to the external environment; when making major decisions (such as financing and expansion), introduce the “opposite thinking” – assume the project fails, list all possible risk points, and formulate targeted hedging plans. For example, Xiao Zeng summarized the risks of the “limit – up and limit – down myth” through review notes, and entrepreneurs can record past decision – making mistakes through an “error list” to form a reusable experience library.
Second, establish a “firewall” for information screening and cultivate independent judgment ability. The “prudent detachment” of Generation Z in the information flood is worthy of reference for entrepreneurs. Facing the “myths of hot industries” and “success cases” in the market, entrepreneurs need to learn to distinguish between “survivor bias” and “general rules”. For example, the emergence of several star enterprises in a certain track does not mean that the track is suitable for all entrepreneurs; a certain model being hyped by the media does not mean that its underlying logic is sustainable. Specifically, an “information grading system” can be established: give priority to studying “primary information” such as policy documents, industry white papers, and authoritative institutional data (such as data from the National Bureau of Statistics and iResearch); be cautious about “secondary information” from social media and self – media, and refer to it only after cross – verification; be absolutely vigilant about “tertiary information” such as “inside information” and “internal resources”. Ran Ran’s method of reverse – screening stocks through policy documents can be transferred to an analysis framework of “policy – demand – supply” by entrepreneurs. For example, they can explore opportunities in the new energy industry chain from the “dual – carbon” policy instead of blindly following hot spots.
Third, balance short – term gains and long – term value and anchor the core goal. Xiao Zeng’s academic performance was affected by chasing short – term gains, and Xiao Li was in conflict between stock – watching and academic studies, which is essentially a “misplacement of goals”. Entrepreneurs need to be clear that the core goal of an enterprise is to “create long – term value” rather than “short – term profit” or “valuation inflation”. In terms of resource allocation, funds and human resources should be preferentially invested in “long – term value – creating links” such as product R & D and user experience, and avoid sacrificing core competitiveness due to chasing market hot spots (such as blind expansion and subsidy – based customer acquisition); in terms of mindset adjustment, entrepreneurs need to accept that “growth has a cycle”. Just as Li Yan used the metaphor of “carrying an umbrella in different weather” to describe market uncertainty, entrepreneurs need to recognize that fluctuations in the business environment are inevitable, but “building their own moat” (such as technological barriers and brand loyalty) is the “umbrella” to deal with fluctuations; in terms of time management, a boundary between “investment” and “main business” should be set. For example, limit the time spent on following market trends to no more than one hour a day to avoid being distracted from the core business by information overload.
Generation Z’s “stock – trading scriptures” ultimately point to the wisdom of “growing in uncertainty”. For entrepreneurs, market fluctuations, fierce competition, and limited resources are essentially different manifestations of “uncertainty”. From Generation Z’s investment practice, entrepreneurs should understand that real growth is not about predicting or defeating uncertainty, but about establishing their own “anchors” in the game with uncertainty – rational cognition, systematic methods, and firm goals. Perhaps this is the most precious inspiration left by this “real – money growth lesson” for all entrepreneurs.
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