Discover the hidden factors behind millennials’ reluctance to invest in the stock market in this revealing article. Gain valuable insights into their hesitation and uncover potential solutions to inspire and encourage this generation to tap into the endless investment opportunities available.
Delve into the eye-opening findings of a recent Bankrate survey, unveiling the secrets as to why millennials are hesitant to jump into the stock market. Gain valuable insights into the underlying reasons behind their hesitation and explore potential solutions and strategies to inspire and encourage this generation to take advantage of the endless investment opportunities available.
Despite a more than 7-year bull market thats still going after challenges including Brexit, 54% of Americans don ‘t invest, a new Bankrate Money Pulse survey finds. And, younger millennials are the age group most likely to stay out of the stock market.
In our survey, just one-third of all millennials — ranging from age 18 up to age 35 — say they invest in the market, either directly by buying stocks or through mutual funds or a retirement account. At the younger end, only 18% of those between 18 and 25 are investing.
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Many millennials say they cant afford it
When we asked millennials why they dont invest, the most popular response, chosen by 46%, was that they dont have the money.
Seeing a cut in my paycheck, even though it was very small was a reason not to participate in a workplace retirement plan, says 22-year-old Bethia Feldman, who works at an early childhood program in Oneonta, New York.
In your early 20s, managing your money can be daunting. I dont know what to think, Feldman says. I hear so many things from my parents, from work, from (my boyfriend).
But she says shes glad she ultimately enrolled in the retirement plan: I think its a good thing to plan for the future.
Looking past stocks
Feldmans 28-year-old boyfriend, Dan Rorick, says a lack of funds keeps him from investing. But if he did have some extra cash, he wouldnt put it in the stock market. Instead, he says he would look at alternative investments, such as precious metals or bitcoin.
Im very much into having as much control over my life as possible, says Rorick, who owns a smoothie and snack shop as well as a small farm in Oneonta.
My parents took the word of other people more than they should have, he says. Now my dad is very wary about touching his money — hes getting taxed on a lot of that income. Its very discouraging as far as being able to enjoy the last years of your life.
Dont know much about stocks and bonds
Benjamin Havey, a 20-year-old junior at the State University of New York at Purchase, north of New York City, says a shortage of funds is just one reason he doesnt invest. Another is that he lacks knowledge.
He stashes money from freelancing as a musician into a savings account, which doubles as his emergency fund. He admits that he knows almost nothing about the stock market. Its probably safer for me to save my money now and invest some portion of my savings later, Havey says.
In the survey, the second most common explanation cited by millennials who dont invest is that they dont know enough about stocks.
Many millennials dont know what a 401(k) is; theyre hazy on the difference between individual stocks and mutual funds, says Mary Beth Storjohann, a CFP professional and the owner of Workable Wealth in San Diego.
Storjohann doesnt buy the conventional wisdom that millennials shy away from investing after having watched their parents go through the financial crisis. In my experience, (millennials) arent leery — theyre uneducated, she says.
Thinking theres plenty of time
A false sense of optimism may keep some millennials out of the stock market, says Charlie Harriman, a financial adviser with Cloud Financial in Huntsville, Alabama.
Younger people believe double-digit returns are typical, he explains. Since theyre in their 20s they think they dont have to hurry to invest. Older generations are a little more educated. They were a part of the financial crisis so theyve seen and experienced the down side of what the markets can do.
Older millennials are far more likely to invest than their younger counterparts. Bankrate found that 44% of those between the ages of 26 and 35 say they currently have money in stocks, either directly or indirectly.
However, investing is even more popular among other age groups. For example, slightly more than half of Generation X Americans — those between ages 36 and 51 — say they have money in stocks.
Bankrates Money Pulse survey was conducted June 16-19, 2016, by Princeton Survey Research Associates International with a nationally representative sample of 1,000 adults living in the continental U.S. Telephone interviews were conducted in English and Spanish by landline (500) and cellphone (500, including 225 without a landline phone).
Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error is plus or minus 4 age points for the complete set of data.
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Thanks to Source: https://www.bankrate.com/investing/millennials-slow-to-start-investing-in-stock-market-bankrate-survey-finds
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