WASHINGTON — Many young adults may be ready to ditch their penny-pinching ways in favor of more investment opportunities, according to a new survey of investment strategists.
Americans in their 20s and 30s will get over their Wall Street wariness and will begin to take on more financial risks, according to a Bankrate survey of top investment strategists.
Three-quarter of the experts says millennials will invest more in equities.
“Once the reality of longer life spans sets in, combined with the realization that Social Security will not provide for them, investing in equities will be seen as a necessity,” W. Bradford McMillan, chief investment officer with Commonwealth Financial Network, said in a news release.
The experts say millennials have the most conservative investment stance of any age group, and also have the biggest future retirement savings need. This means millennials have a need to get a higher nest egg for retirement.
While millennials are doing well when it comes to accruing savings compared to other age groups, many young adults are not investing — instead parking their money as cash. Experts say life changes will make some millennials turn toward the stock market as an investment strategy.
“Millennials will buy houses and invest and become stodgy old folks with slightly more conservative tendencies like every generation before them,” Jeff Reeves, executive editor of InvestorPlace.com, said in a news release.
So what tips do the experts have for millennials looking to invest?
- Millennials should embrace the potential for higher returns in equities and create a well-diversified portfolio.
- A well-diversified portfolio should include access to international markets, as well as a balance between growth and value.
- Look for broad-based, well-diversified index funds.
- The goal is to earn better returns while mitigating risk.
Bankrate surveyed 20 stock market professionals online between June 18-25.
