Millennials have been less inclined to own stocks than their parents are. About 26 percent of Americans under the age of 30 own stocks compared to 58 percent of baby boomers, according to Bankrate.com.
But the young investors who are jumping into the market are choosing very different stocks than their parents are.
In an exclusive analysis for CNBC.com, online portfolio manager SigFig examined 410,000 portfolios for 220,000 investors who had at least one stock holding. They identified which stocks were most likely to be owned by millennials compared to baby boomers, and vice versa. Turns out the two generations not only favor different companies, but different sectors, as well.
SigFig researchers found millennial investors are most likely to own stock in Advanced Micro Devices, SolarCity, Twitter, GoPro — and Tesla, which they're 2.7 times more likely to own than boomer investors. Boomers, meanwhile, tend to favor larger, well-established companies. They are more than five times more likely than millennial investors to own shares of Southern Co., an electric utility company, and about five times more likely to own shares of Honeywell, Duke Energy, Merck and Mondelez, a multinational food and beverage conglomerate.
Why the disparity? Age explains a lot of it. For one, millennials are in the accumulation phase, said Marla Mason, a certified financial planner and vice president of the Colorado-based brokerage firm America's Retirement Store. "They are looking for growth," she said. "They are not necessarily looking for their grandfather's portfolio of large blue-chip, dividend-paying stocks and bonds."
Millennials are also more likely than their parents to pick stocks based on familiarity, looking at companies that produce products they use, she added. That hasn't paid off in the short run; year to date, the boomers' stock picks have outperformed the millennials' favorite stocks. (See video.) But millennials do have more time to ride out the market's ups and downs.
Still, if you're a young investor, there are additional steps you can take to improve your chances of long-term financial success.
1. Get your finances in order. Before you even open an investment account, make sure you've paid off any credit card debt and that you have money set aside in a savings account in case you get hit with unexpected expenses or a job loss. Aim for enough to cover about three to six months' worth of expenses.
"If you don't have that money set aside first, then it really doesn't make sense to put money aside in the markets," said certified financial planner Charles Bennett Sachs of Private Wealth Counsel in Miami.