BBRG: Millennials Are Sitting Out the Bull Stock Market

Millennials Are Sitting Out the Bull Stock Market
The financial crisis left scars that have yet to heal.
Bloomberg, September 5, 2018




What happens to the generation of investors who comes of age in the middle of the worst financial crisis since the Great Depression? On the 10th year anniversary of the Great Financial Crisis (GFC), it is worth thinking about. The evidence suggests their experiences scarred them; we do not yet know if this psychological damage is permanent.

So far, it has proven to be very damaging.

That is the conclusion of a Vanguard white paper, titled “Risk-Taking Across Generations.”

You may have missed it when it was first published over the summer (I did, too), but it is worth considering in light of its huge data set. The low-cost investing giant analyzed 4 million Vanguard retail investor households, and while many of the findings were pretty run of the mill, some details were shocking. The most stunning conclusion: “Millennials who started investing at Vanguard after the global financial crisis are more than twice as likely to hold zero-equity portfolios as those who started investing before.“

Millenials are typically defined as the generation born between 1981 to 1996. They are now 22-37 years old, implying an investment time horizon of 30 to 45 years to age 67. Given that investing period, a portfolio overweight in equities versus the traditional 60/40 portfolio is appropriate . . . 



Continues at Bloomberg



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