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Baby Boomers and Millennials: Do They Invest the Same Way?

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  • (0:40) - How are generations trading differently?
  • (4:30) - What is causing these generational trends?
  • (8:06) - Top ten holdings by generation.
  • (10:27) - Political Impact: Are investors trading differently?
  • (14:50) - Big moves in the oil market: Are ETFs seeing the same trend?
  • (17:00) - Keith Denerstein talks about what trends he's been seeing.
  • (20:10) - Episode Re-cap.

Do people of different generations invest the same way? Or does age help to shape preferences when it comes to trading selections?

To get the answers to these questions, and more insights on generational differences for investing, I spoke with Keith Denerstein, the Director of Guidance Product Management at TD Ameritrade (AMTD - Free Report) . Keith has his finger on the pulse of these trends, and has the ability to tell us where investors are shifting their focus.

In particular, we take a closer look at the asset allocation breakdown for generations, and some of the top holdings for each group. We also investigate which segments are surging and also falling by the wayside for each generation, and how these patterns have shifted in recent months.

We also talk about shifts since the election of Donald Trump, and how Baby Boomers in particular have been moving their money around. One key area to watch is in the gold market—such as with funds like GLD and IAU – as Millennials and Gen Xers have seen reduced exposure, while Boomers have more-or-less held steady, with Boomers appearing to consider gold as more of a core holding than their younger counterparts.

Another key area of difference is that of income and yields. Older investors appear to prefer to more conservative sources of income such as muni bond ETFs, like MUB for example, while younger investors tend to get their dividend exposure from more volatile and equity-linked sources, such as high yield funds or REIT ETFs instead.

One more insight that we dive into is the idea that Millennial investors have a greater focus on the broad market index funds which often have the lowest costs. These products, such as an IVV or SPY, tend to attract Millennial investors a bit more than sector-based funds, which Millennial investors have shunned more than their older peers, seemingly focusing in on lower fees instead.

We also talk about Gen Xers too though, and there was a very interesting point Keith made about their exposure profile. This group has a disproportionate focus on emerging markets, with ETFs like VWO and EEM being examples, though there is a definite trend among younger investors to do a better job of shedding their ‘home country bias’.

Bottom Line

We take a broad look at a number of key market trends, diving deep into how dissimilar groups allocate their money in different ways. But for an in-depth look at how generations invest differently and some recent trends in the market, make sure to listen to the podcast for additional information. Not only will you learn how investing is shifting as Millennials take over, but you’ll find out if your recent picks are part of the trend, or an outlier among your age group!

So, make sure to listen to this edition of the Dutram Report for a closer look at this topic, and for insights into the overall market trend as of late too. And for more news and discussion regarding the world of ETFs, make sure to be on the lookout for the next edition of the Dutram Report, and check out the many other great Zacks podcasts as well!

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