Survey sheds light on differences between millennial and baby boomer investors.
Move aside, Mom and Dad.
A new survey reveals that when it comes to financial matters, millennials are ready to step out of the shadow of the Baby Boomers and take control of their financial futures. The survey, from life insurance and financial services company Securian, found that 71% of millennial investors predict a bull market in the next one to three years, compared to only half of boomers who share that confidence.
In addition, the survey of 2,000 investors, evenly split between millennials and boomers, revealed that millennials are surpassing the previous generation in terms of investing with confidence. Forty-two percent of millennial investors say they are “very knowledgeable” about investments, compared to only 17% of boomers.
The findings are particularly interesting in these times of market volatility. The Brexit decision, financial concerns in Asia, and many other factors have contributed to significant concerns from investors and major swings in the key market indices. But survey respondents appear ready to ride the wave: only 12% of millennials say they are not very knowledgeable about investments, compared to 25% of baby boomers.
Interestingly, the familiar target number of $1 million needed for retirement still seems to be the benchmark number, even for a new generation. But while boomers are unsure if they’ll meet that goal (45% think it’s likely), more than half of millennials believe they’ll reach the goal. Perhaps they should aim higher; there is nothing magical about the $1 million figure. While that goal is a worthy one and is much more productive than having no goal at all, with growing life spans and increasing costs for healthcare and other goods, millennials and the generations after will be well-served to set higher goals.
A few other noteworthy findings from the survey:
• As investors, millennials buck the trend you might expect: they’re generally more conservative in their investing strategy than boomers are.
• Both groups seek advice from financial advisors at the same rate, 65%. Boomers are more apt to also use news outlets for advice, while millennials turn to family more often. (Good thing Mom and Dad are reading the news!)
• Millennials do use money management websites at much higher rates than do boomers.
• More millennials than boomers (42% to 29%) expressed high levels of concern about market volatility and its impact on them reaching their retirement goals. They also project confidence about their understanding of the volatility, and are more likely to take action to mitigate volatility.
Go here for more information on the survey, which was conducted late last year.