Why is Gen Z so impatient?

Nate rants about why Gen Z is actually impatient, Tim explains why you shouldn’t let ChatGPT pick stocks for you, Jon shares tax planning tips for 2023, and Bennett looks at where inflation has lessened and where it hasn’t.

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01. Gen Z is impatient, but not for the reasons you think

From Nate Hoskin, Founder & Lead Advisor

If there is one constant of being a 24-yo simultaneously climbing the corporate ladder and building a business, it is being called impatient. I want to share a few phrases that have been said to me in the past two months and explain why they miss the mark.

“Gen Z has no loyalty, they’ll job hop if they don’t get what they want. They don’t pay their dues.”

This common lament brushes aside a far deeper issue. Gen Z, particularly new graduates, are incentivized to job hop because it is the most effective way to improve their pay. The average pay raise is about 3.9% while the average increase for job hopping is nearly 12%. Gen Z’s tendency to job hop has nothing to do with a lack of loyalty and work ethic. In fact, Gen Z craves stability more than any other generation. Unfortunately, that stability is not rewarded by employers.

“Gen Z wants a promotion six months after being hired because they feel entitled.”

Unfortunately, we don’t have the luxury of waiting. Most of us are drowning under mountains of student loan debt, crippling living expenses, and are being paid the same wages our parents were at our age. It’s not our vanity at stake, our financial security relies on getting raises and promotions so we can afford basic necessities.

We are also members of the most productive generation, powered by AI and instant access to information, but our productivity is not reflected in our paychecks.

“Gen Z is so politically active because they think they can change the world, such naive confidence.”

I’m not even sure I should go into this one, it’s clear to us youngins where the “wait and good things will come” mantra got us. To highlight this point, I’ll direct your attention to NASA’s Vital Signs for the Planet and the fact that 338,000 students have experienced gun violence since 1999.

Thank you for reading my rant, I have been impressed by the condescension I have received as Hoskin Capital has gotten more attention in the media. If you were in Gen Z’s position, would you be impatient too?

02. ChatGPT's wild ride in the world of finance

From Tim Frenzel, Head of Data Analytics & Research

The widely acclaimed artificial intelligence language model, ChatGPT, has recently been hailed as a revolutionary tool for predicting stock market trends. My opinion: Trusting ChatGPT with your stock market predictions is like letting your dog drive your car – sure, it's impressive, but you'll probably end up in a tree.

Upon closer examination, it becomes evident that the touted capabilities of ChatGPT are often exaggerated, as enthusiasts on Youtube and other platforms tend to emphasize successful models while disregarding underperforming strategies (Survivorship Bias! Please go back to Analytics 101). Moreover, the effectiveness of technical trading strategies, which these ChatGPT "models" primarily employ, has been consistently challenged by the Efficient Market Hypothesis, implying that these strategies often underperform when compared to random approaches (aka the monkey portfolio).

However, this doesn't mean that ChatGPT and other AI tools lack merit in this area. ChatGPT demonstrates considerable value in enhancing financial literacy and accelerating information processing for investment managers and analysts. The key to maximizing ChatGPT's potential lies in a collaborative partnership with domain experts. By merging the complementary strengths of human expertise and AI-driven tools, it becomes feasible to devise sophisticated yet efficient financial analysis methods that can be seamlessly integrated into comprehensive, well-rounded investment processes.

03. Tax Day is Monday, what come’s next?

From Jon Scott, Lead Author

Tax Day is coming up (Monday, April 18th) and while I hope all of you have already filed your taxes, just know that it is never not tax time.

Why? Because the only things promised in this life are death and taxes. While that may be true, the true reason tax time is never ending is because there are always actions you can take during the year to reduce your tax bill.

For example, did you know you can reduce your taxable income by almost $30,000 by contributing the full amount to your 401(k) and HSA accounts? Yes you can, and you can find more information on our Knowledge Base about both accounts. And we didn’t forget about our readers who are teachers or government workers, this week we added a new article on 403(b) plans as well.

For those of you who own a business and work alone, there is a 401(k) account allowing you to save $66,000 from your tax bill–you may want to subscribe to the Knowledge Base and save yourself a hefty tax bill, or–you know–just give a lot of that money to Uncle Sam…

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04. What Does This Week’s Data Mean for Rate Hikes?

From Bennett Fees, Economic Research Associate

CPI data came in this week and increased 5% down from 6% in February with core CPI increasing slightly to 5.6% yearly up from the 5.5% increase in February. But as we know, Powell likes to break up core inflation into three categories: core goods inflation, housing services inflation, and inflation in core non-housing services or NHS.

Progress has been made in the first category which has remained relatively stable. The second category, meanwhile, is still high with the broader rise in shelter costs being the predominant driver of the uptick in Core CPI (granted housing costs have a notorious lag of around a year so we are mostly waiting on this front). As for core non-housing services, which happens to be the Fed’s favorite inflation measure, the stagnant yearly increase of 3.7% tells us that there could be reason for Fed officials to continue with another hike.

Comparatively, other data this week has been more positive. The producer price index (PPI) beat expectations and had the biggest decline in three years and the Atlanta Fed’s Business Inflation Expectations (BIE) survey, a well regarded measure of firm expectations, showed a significant decrease resulting in the lowest year-ahead inflation expectations since July 2021.

That said, we know almost as much about what comes next from looking at how Fed officials interpret economic data than we do from the original data itself. This week, from the March Minutes, we found out officials have included a mild recession in their outlook and from the dot-plot we know that most officials anticipate a final quarter-point increase with no cuts in 2023. While the likelihood of a pause is on the table, the bond market remains unconvinced and favors another quarter-point hike. Given Powell’s firm aversion to signaling any premature loosening, I’m inclined to agree.

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I learned a long time ago the wisest thing I can do is be on my own side, be an advocate for myself and others like me.

- Maya Angelou

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