How do psychological biases, financial literacy education, and digital influences shape investment choices for Gen Z in today’s financial landscape?
DOI:
https://doi.org/10.58445/rars.2924Keywords:
Gen Z investors, Financial Literacy, Behavioral biases, Overconfidence bias, Confirmation bias, Loss aversion, Digital finance, Investment psychology, Personal FinanceAbstract
As Gen Z continues to enter the financial world in growing numbers, it has become crucial to understand the psychological, social, and educational factors that shape their investment behaviors. This paper reviews the emerging data on Gen Z’s financial literacy, investment strategies, debt habits, and approach to homeownership. Furthermore, it provides insight to where Gen Z turns for financial advice, often favoring social media over traditional sources, and examines behavioral economics concepts like overconfidence and loss aversion. The paper also discusses how confirmation bias plays a significant role in their decision-making. The rapid growth of the digital age has created social platforms that influence young investors by introducing both opportunity and risk. Technology accelerates access to information but often blurs the line between fact and misinformation. By drawing comparisons to older generations and established financial patterns, this review gives insight into how these trends could shape long-term financial outcomes. In conclusion, this paper is a call to action for everyone, including educators, financial institutions, and Gen Z. Without intentional financial education and media literacy, the risk of repeating historical mistakes only grows and becomes more costly for the new generation of investors.
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