We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Some millennials are more inclined to live for today rather than save for tomorrow. Their interest in vacationing, spending money on items that have no long-term benefits, and buying expensive things reflect this approach.
A look at the investment pattern of the millennial generation reveals that this group has a more conservative stance. Thanks to growing market volatility and uncertainty related to investment returns, millennials prefer to play it safe and tend to be risk averse.
Also, with the oldest members of this demographic being 37 years old and the youngest just 22, most millennials believe that they have ample time to invest and save for their life after retirement.
Spending Pattern
Financial experts believe that their spending attitude is the main reason for their failure to save. However, millennials remain confident about their spending decisions. A survey conducted by Charles Schwab reveals that 81% of millennial responders were optimistic about their spending.
Many millennials are smart, tech-savvy shoppers; they use physical stores to check or verify a particular item, and then buy the same product online to get a better discount and/or to save time. Millennials also use digital payment methods like Apple (AAPL - Free Report) Pay or other mobile wallets, which can help generate popular cash back offers.
Investments & Saving Patterns
For those millennials that do invest, they tend to consider “socially responsible investments,” or SRI, which aid environment sustainability and social justice.
A survey report from TD Ameritrade shows that 43% of respondents considering SRI are millennials compared to 33% Generation X, 25% Baby Boomers and 18% mature investors. This is due to the fact that many millennials put more of an emphasis on environmental benefits and human rights.
Further, all of these studies and reports by experts and big firms have done a good job of creating financial awareness, spurring some millennials to start saving more than ever.
Millennials trust their management skills, and are more willing to rely on their personal savings after retirement since Social Security has become a big concern. Further, some are adopting a “do-it-yourself” approach to finance their investments rather than depend on retirement plans like 401(k)s and Individual Retirement Accounts (IRAs).
This DIY tactic is definitely an example of their risk aversion, as many saw the struggle of their parents and grandparents during the Great Recession. Additionally, many millennials bear the burden of student loan debt, which can prevent them from taking on big risks.
Is the Investment Pattern Changing?
Although millennials are considered conservative investors, there has been a notable shift in this trend as many consider putting their money in very risky investments like bitcoin.
In a survey conducted by Sustany Capital, 88% of millennials are interested in investing in cryptocurrency. They think that bitcoin ensures a quick and smooth exchange of money that is not reliable on big banks.
But while bitcoin and other cryptocurrencies had a great run in 2017, they witnessed a drastic fall in 2018. Like with other “trendy” investments—think marijuana—bitcoin is no doubt risky; there’s a lot of volatility and little regulation.
Bottom Line
Not all millennials invest the same way, though a good number tend to be more conservative with their cash and savings.
While bitcoin and other trendy investments are undoubtedly appealing, and can pay off in the short term, one should be well aware of the inherent risks they pose before investing any time and money.
For those who want to start investing, they should consider building a diversified portfolio with the right level of risk to get better returns in their retirement years. Millennials are at the right age to invest in the stock market and other securities, with enough time to see their investments grow and flourish thanks to compound interest.
A Simple Way to Build Wealth
No matter what your financial goals are, investing in quality stocks is an option worth considering. Stocks have produced better returns than other kinds of investments over the years and generated significant wealth for shareholders. If you're interested in stocks but you're nervous about picking the right ones, Zacks can help. Our research team makes it simple to find long-term buys with long-term wealth-building potential. Starting today, you can see our private selection of stocks priced under $10, Warren Buffett-style value picks, dividend stocks and more. Click here for your sneak peak >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Millennials Changing the Way They Invest?
Some millennials are more inclined to live for today rather than save for tomorrow. Their interest in vacationing, spending money on items that have no long-term benefits, and buying expensive things reflect this approach.
A look at the investment pattern of the millennial generation reveals that this group has a more conservative stance. Thanks to growing market volatility and uncertainty related to investment returns, millennials prefer to play it safe and tend to be risk averse.
Also, with the oldest members of this demographic being 37 years old and the youngest just 22, most millennials believe that they have ample time to invest and save for their life after retirement.
Spending Pattern
Financial experts believe that their spending attitude is the main reason for their failure to save. However, millennials remain confident about their spending decisions. A survey conducted by Charles Schwab reveals that 81% of millennial responders were optimistic about their spending.
Many millennials are smart, tech-savvy shoppers; they use physical stores to check or verify a particular item, and then buy the same product online to get a better discount and/or to save time. Millennials also use digital payment methods like Apple (AAPL - Free Report) Pay or other mobile wallets, which can help generate popular cash back offers.
Investments & Saving Patterns
For those millennials that do invest, they tend to consider “socially responsible investments,” or SRI, which aid environment sustainability and social justice.
A survey report from TD Ameritrade shows that 43% of respondents considering SRI are millennials compared to 33% Generation X, 25% Baby Boomers and 18% mature investors. This is due to the fact that many millennials put more of an emphasis on environmental benefits and human rights.
Further, all of these studies and reports by experts and big firms have done a good job of creating financial awareness, spurring some millennials to start saving more than ever.
Millennials trust their management skills, and are more willing to rely on their personal savings after retirement since Social Security has become a big concern. Further, some are adopting a “do-it-yourself” approach to finance their investments rather than depend on retirement plans like 401(k)s and Individual Retirement Accounts (IRAs).
This DIY tactic is definitely an example of their risk aversion, as many saw the struggle of their parents and grandparents during the Great Recession. Additionally, many millennials bear the burden of student loan debt, which can prevent them from taking on big risks.
Is the Investment Pattern Changing?
Although millennials are considered conservative investors, there has been a notable shift in this trend as many consider putting their money in very risky investments like bitcoin.
In a survey conducted by Sustany Capital, 88% of millennials are interested in investing in cryptocurrency. They think that bitcoin ensures a quick and smooth exchange of money that is not reliable on big banks.
But while bitcoin and other cryptocurrencies had a great run in 2017, they witnessed a drastic fall in 2018. Like with other “trendy” investments—think marijuana—bitcoin is no doubt risky; there’s a lot of volatility and little regulation.
Bottom Line
Not all millennials invest the same way, though a good number tend to be more conservative with their cash and savings.
While bitcoin and other trendy investments are undoubtedly appealing, and can pay off in the short term, one should be well aware of the inherent risks they pose before investing any time and money.
For those who want to start investing, they should consider building a diversified portfolio with the right level of risk to get better returns in their retirement years. Millennials are at the right age to invest in the stock market and other securities, with enough time to see their investments grow and flourish thanks to compound interest.
A Simple Way to Build Wealth
No matter what your financial goals are, investing in quality stocks is an option worth considering. Stocks have produced better returns than other kinds of investments over the years and generated significant wealth for shareholders. If you're interested in stocks but you're nervous about picking the right ones, Zacks can help. Our research team makes it simple to find long-term buys with long-term wealth-building potential. Starting today, you can see our private selection of stocks priced under $10, Warren Buffett-style value picks, dividend stocks and more. Click here for your sneak peak >>