REPOST: Super-rich millennials are defying the way their parents have been investing for decades

While investing decisions and strategies generally differ from person to person, the ultra-wealthy millennials seem to have a common denominator: they prefer assets that reflect a greater appetite for risk, such as structured products, venture capital, and private equity. The full story on the Business Insider:

Specialist trader Meric Greenbaum works with his daughter on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 25, 2016. Brendan McDermid/Reuters


Millennials who invest are approaching investing quite differently from how their parents and grandparents did, a recent survey found.

The 2008 financial crisis, which happened as many in the 21 to 36 age bracket came of age, seared memories of traditional asset classes like stocks cratering and retirement savings being wiped out.

"I won't say there's a mistrust of fixed income or equities or anything paper-related," said Joseph Quinlan, the chief investment strategist at US Trust, which surveyed over 800 high-net-worth adults with at least $3 million in investable assets. Millennials are  just more interested in more "sophisticated" assets like structured products, venture capital, and private equity, the survey found.

Favoring other assets reflects a greater appetite for risk among millennials; seven in 10 that US Trust surveyed said they cared more about generating income for near-term financial goals like paying down debt than long-term capital appreciation.

Also, millennials have greater concern than older age groups about impact investing: buying into companies that would generate returns but also improve the environment and society. "They want to do good and well with their investments," Quinlan said about the focus on both impact and return.

This is happening as the world pays more attention to issues like women's rights and climate change, but also amid empirical studies that show gender-diverse firms outperform in the market and are less volatile. 

That's not to say millennials are shunning traditional investments like equity in public companies. But they're not as eager to invest in plain-old stocks like baby boomers, which US Trust categorized as those aged 53 to 72.

The survey suggested that boomers are trying to make up for missing out on returns during the eight-year bull market, in which the benchmark S&P 500 has more than tripled.


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"The opinions expressed in this re-posted article are not necessarily the views of LOM, but are presented to provide a broad spectrum on financial matters."

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