Cash Is Costing Millennials

By Kathy Lynch, Financial Advisor magazine

Fifty-three percent of investors in their late twenties and thirties said that "possibly missing out on investment growth is a bigger worry to me than the risk of losing money in the short term," up 16 percent from 37 percent in 2012, according to a Hearts & Wallets survey released recently.

For the Investor Mindset study, the Hingham, Mass.-based financial research firm surveyed investors ages 21 and older. Hearts & Wallets split Millennials into two groups: emerging investors – ages 21 to 27, and early career investors – ages 28 to 39. (There are no precise dates for when the Millennials were born. A report conducted by the Pew Research Center defines adult Millennials as those who are aged 18 to 33 years, born between 1981 and 1996.)

Slightly less, 49 percent of emerging investors were more worried about missing out on growth than losing money.

Regarding the entire group, Chris Brown, partner and co-founder of Hearts & Wallets, said, “Millennials are going through a dramatic shift as they see the impact of the recent bull market and how their strategy of holding cash is costing them.”

For both groups, the top financial goal was to build an emergency fund, followed by having enough money to 'be able to work less/spend time as I want when I am older.' To 'stop work altogether/retire' came in a distant third.

“Not everything has to focus on retiring from work,” said Varas. “Younger investors want to take matters into their own hands to learn more about good savings and investment behaviors to accomplish their top goals, especially security against the unexpected and flexibility for when they are older.”

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The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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