Yahoo Finance Millennials are smarter investors than their parents
Study after study finds millennials have been too ‘traumatized’ by how the 2008 financial collapse devastated their parents to step into the stock market. But apparently - that doesn't stop them from being smarter investors than their parents, according to SigFig, a low cost investment management firm.
SigFig’s data found overall, millennials pay less for their investments and tend to invest in low-cost ETFs instead of active mutual funds, which boomers are likely to be invested.
Millennials are no longer afraid of the stock market but more concerned about missing out on the big gains said Mike Sha, SigFig’s CEO and co-founder. Sha believes “people kind of forget we’re in amidst of a six year bull market…that’s caused folks that are younger to come out and put their money into the markets.”
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More active trading by boomers is also making the younger generation look better. SigFig found the average investor in their 20’s trades 23 times per year; while the average investors in their 60’s trades 52 times a year.
Despite other research like State Street’s finding that millennials, regardless of historically low interest rates, hold a significant chunk of their portfolio in cash. Sha disagrees saying the period where millenials were more conservative “has gone away.”
Sha also thinks “the market has come up with some really easy ways to automatically invest.” And believes innovation is positive for all investors saying “technology will help democratize access to high quality investment advice.”
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