What Excites Millennials? A Stock Market Crash!

As markets careened lower to the tune of 10% in February, millennial investors got a thrill up their legs versus their older peers. 

According to a survey by Bankrate.com, 19% of millennials aged 18 through 37 said they had "feelings of excitement" during the correction vs. 8% for Generation-X and just 4% for Baby Boomers.

“If you’re a long-term investor you want to be able to buy low, and millennials had a chance to add to their retirement accounts at a lower price,” Bankrate analyst Taylor Tepper told Bloomberg. “In that sense, it’s very exciting.”

Over 25% of the giddy millennial investors reported adding to their stock holdings during the correction - far more than the other demographics. 

The survey conducted from February 28 through March 1, questioned 2,287 U.S. adults, only 1,063 of whom said they have an investment accountOf that, just 30% of millennials had investments vs. 46% of Gen-X and 54% of Baby Boomers

Bankrate's Tepper also noted that millennials - who are disproportionately anti-Trump, saw February's selloff as the first "Trump correction" after a massive 33% rally following the 2016 election. 

Safe Space

Millennials, scarred by the financial crisis and what they saw of the recession, have been been reluctant to invest according to Merrill Edge's Aron Levine. 

"In stark contrast to older generations who are relying on outside sources for their future financial security, millennials are looking to their self-created savings years down the line," Levine said in a December report. "Millennials place even greater trust in their own stewardship than they do in their personal relationships with their significant other and friends."

During the financial crisis, millennials "saw their parents and grandparents suffer and struggle with either Social Security not being there or being there and not being enough," Levine says. Thanks to that, millennials feel they "need to be relying on themselves and their own ability to save and invest."

And of the millennials which do invest, according to the report, they don't take big risks. 46% of millennials say they're more financially conservative than their parents, while 35% say they're more conservative than their grandparents!

Broke and broker

When you ain't got nothing, you got nothing to lose

-Bob Dylan

With the average millennial college graduate carrying $30,000 in debt, and average millennial net worth standing at $10,900 (around half of what their parents were worth at the same age), it's no wonder they're cautious. 

According to a 2017 GoBankingRates survey, 67% of young millennials (age 18-24) have less than $1,000 in savings and 46% with no savings at all.

For "older" millennials the picture isn't much different, with 61% of those between the ages of 25 and 34 reporting less than $1,000 in savings and 41% with no savings

During February's selloff, investors overall kept calm - with only 6% pulling cash from their accounts. Nearly half of the Bankrate.com respondents said they felt "indifference" to the selloff, vs. 13% who were scared.

“President Trump sort of talks about [stocks] on Twitter all the time, so there’s a visibility around stock indexes hitting all-time highs,” Tepper said. “When the selloff happened, I was concerned that many people would start selling and change their behavior. But they didn’t really seem to do so.”

Comments

curbjob Mon, 03/19/2018 - 17:01 Permalink

"Millennials, scarred by the financial crisis and what they saw of the recession, have been been reluctant to invest according to Merrill Edge's Aron Levine. "

I got this far ...

The alternative, and what Mr Levine doesn't realize stuck inside the confines of  his tribe think, is that millennials don't earn enough to invest. 

Laowei Gweilo gregga777 Mon, 03/19/2018 - 19:00 Permalink

to be fair, if instead of comparing Millennials to Gen X and Boomers, if you compared people of any age with no stocks but the future potential to buy stocks (and therefore may want to get in 'cheap) versus those already with stocks, you'd probably find even higher correlation hoping for a crash.

 

probably for the same for Millenial socialists, too, to be fair... but I think it's a large part of both and more the former -- not that they want stocks to to 'crash forever' but to just be cheap (so they can buy).

In reply to by gregga777

D503 johngaltfla Tue, 03/20/2018 - 00:28 Permalink

The single best market plan is having access to a hunting lodge, a weapon, and a vast array of tools for self sustainability. 

Once boomers realize we aren't interested in wiping their asses, maintaining their mcmansions, or their idiotic volume of administrative oversight, the only result will be a massive selloff of unwanted assets. 

Rent is hard to collect when you're a geriatric cunt without the support of the military and police.

In reply to by johngaltfla

greenskeeper carl ThanksChump Mon, 03/19/2018 - 19:48 Permalink

Half bored 33 year old here. I'm in the same boat. I started paying attention after the 'great recession' and genuinely believed that it could all be fixed with the right people in charge, like Ron Paul. Could he have actually fixed any of it had he been elected in 2008? 'Here and now me' highly doubts it, but I believed and gave a shit in 2008. Now, not so much. I do still care, since it obviously effects me and will certainly have a massive impact on the lives of my children, but I no longer believe its fixable.

In reply to by ThanksChump

Peak Finance general ambivalent Mon, 03/19/2018 - 17:45 Permalink

This:

Literally every article is about a stock market crash in some way. Even the countless articles

IS literally the most important finance question of our time, and will define EVERYTHING both local and geopolitical over the next 30 years. There are basically three options (with slight variations) examined here daily:

Will it crash and then highly deflationary depression?

No crash and direct to Hyperinflation??

or 

WWIII + forced reset??? 

 

In reply to by general ambivalent

gregga777 curbjob Mon, 03/19/2018 - 18:49 Permalink

Over five thousand years ago, Moses said to the children of Israel, "Pick up your shovels, mount your asses and camels, and I will lead you to the Promised Land." Nearly 75 years ago, (when Welfare was introduced) Roosevelt said, "Lay down your shovels, sit on your asses, and light up a Camel, this is the Promised Land." Today, Congress has stolen your shovel, taxed your asses, raised the price of Camels and mortgaged the Promised land! I was so depressed last night thinking about Health Care Plans, the economy, the wars, lost jobs, savings, Social Security, retirement funds, etc... I called a Suicide Hotline. I had to press 1 for English, I was connected to a call center in Pakistan. I told them I was suicidal. They got excited and asked if I could drive a truck...

In reply to by curbjob

JuliaS curbjob Mon, 03/19/2018 - 20:54 Permalink

The reason they keep manufacturing these lies is not because they want to fool millenials, but because they want the older generations to keep from dumping stock, thinking it's all sentiment-driven. They want them to believe there'll be a buyer when they turn sellers.

The article is written for boomers, not millenials.

In reply to by curbjob

heads_and_thales curbjob Mon, 03/19/2018 - 21:41 Permalink

The ones who are investing are the ones who get living expense top-ups from their family. Many young people working corporate jobs (at least here in Toronto) are not earning nearly enough to support their lifestyle + rent. Help from mom & dad pushes them into a "surplus", so that they can have money left over to invest and feel "independent". 

In reply to by curbjob

besnook Mon, 03/19/2018 - 17:05 Permalink

the millenials are similar to the depression generation. the depression created the biggest most penny pinching bunch of people the usa has ever known. the millenials are not as motivated but share similar world views.

adr besnook Mon, 03/19/2018 - 17:31 Permalink

No they aren't. Depression era people could do hard labor and figure out how to turn one chicken into two weeks of meals.

Millennials can barely work a register at McDonald's without Google telling them how to do it.

If you gave 100 millennials a pile of lumber, nails, and hammers and tell them to build a shelter you'd end up with 100 boards with a single bent nail in them.

In reply to by besnook

AGuy adr Mon, 03/19/2018 - 18:08 Permalink

"If you gave 100 millennials a pile of lumber, nails, and hammers and tell them to build a shelter you'd end up with 100 boards with a single bent nail in them."

I don't think so. You just see that they removed the plastic covering the lumber and a path of foot prints to the nearest coffee shop that has Wi-Fi! Removing the plastic was challenging enough and consider a full days work.

In reply to by adr