Another week in the covid crisis, and another harbinger of societal change. One day it was the jobless rate potentially revisiting Depression-era levels, the next it was the news that university fees for certain courses would soar. That economics or commerce degree you had your eye on will cost you 28 per cent more next year. Some welcomed the news and applauded the concomitant fall in the cost of a teaching or nursing degree.

What are the consequences for financial literacy among younger people? Will fewer students of economics and commerce mean more onus on high schools to teach money management? Will there be greater reliance on robo advisers? Time will tell.

Yet despite these developments a Morningstar survey of young Americans, aged 18 to 25, suggests room for optimism. Even in the face of the health crisis and the ensuing 40 million job losses in the US, Generation Z, as they’ve become known, are relatively upbeat about the future. Almost two thirds of the 1100 respondents said they were happy and optimistic about the future. Ninety-one per cent of believed they would eventually retire, and the majority believed that they would do so either at the age of 65 (26 per cent) or before (43 per cent), which is a more sanguine take on retiring before 65 as compared with previous generations.

As for financial literacy, every respondent says they use at least one finance app; only 18 per cent had interacted with a robo adviser and were more trusting of a real, i.e. human, adviser. Debt also factored into the conversation: 76 per cent said paying off debt was currently more important than saving for retirement—a preference that persisted regardless of when respondents thought they’d retire. And more than half of respondents said financial classes should be mandatory in both high school and college. You can read more here.

Financial apps and reported usage

Speaking of young people and fintech, don’t miss Firstlinks this week, which includes a riveting—and somewhat troubling—piece by Graham Hand on the rise of investing apps like Robinhood. “The so-called corona generation, or in the US, Robinhood traders, may be at the margin, but new retail investors are having a growing impact as their numbers increase rapidly,” Hand writes. It’s a timely piece, particularly in light of the news this week that a 20-year-old Robinhood user committed suicide after discovering he was more than a million in the red.

Hand also hears from Marcus Padley who gets all Marie Kondo on us and suggests you declutter your portfolio of its “dog stocks” and help offset the tax liability on capital gains elsewhere. I interrupted my reading of Padley to release one such dog.

Elsewhere this week, Morningstar equity analyst Gareth James reveals that 106 stocks still trade below their fair value estimate, and 15 retain the highest five-star rating; Emma Rapaport complements this with a look at stocks with lower-risk profiles; Glenn Freeman talks to retail analyst Johannes Faul, who warns that investors shouldn’t project the pandemic-driven performance of JB HiFi and Harvey Norman too far into the future; Susan Dziubinski revisits the Morningstar Exponential Technologies Index, and compiles a list of stocks that are trading at 4-star levels; Anthony Fensom explains why Asian central banks are talking a walk on the wild side and why investors in Australia are vulnerable as governments across the region try to stimulate growth.

And finally, Morningstar’s head of economics Preston Caldwell mounts an argument as to why the US recovery from the covid crisis will be much quicker and more complete than the one after the global financial crisis.

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