The stock market is up 17% in the last year and up a whopping 197% since its March 2009 low.
Unfortunately, far too many young people haven’t participated in this rally, and unfortunately, this may be detrimental to their futures.
According to a new survey by Bankrate.com, millennials are uncomfortable with choosing the stock market as their preferred method of investing “money they don’t need for at least 10 years.”
The survey reveals that today’s young Americans have a rather conservative investment style.
“Thirty-nine (39%) per cent say cash is their preferred way to invest” money. Only one-third (or 13%) of that picked the stock market.
Overall, 25% of Americans prefer cash, followed closely by real estate with 23% and stocks with 19%.
Bankrate.com’s senior financial analyst, Greg McBride spoke with Yahoo! Finance where he noted that the problem with millennials not investing is that they “don’t have the pensions that their parents had [… and] they have got a bigger burden of accumulating wealth on their own for their retirement needs particularly in an era where life expectancies are getting long, health care costs are going up.”
He adds that “hankering down in safe haven investments” runs the risk of millennials falling short in the long run.
However, perhaps this pervading cynicism of young Americans is a product of the millennial experience.
For starters, they have lived through the financial crisis. Furthermore, they’re better educated than previous generations, but they are struggling to find jobs. And finally, they’re worried about student loans and they might not retire until 73.
Consequently, millennials may feel as though they need to hold their money exactly where they see it — with cash.