Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

In defence of millennial investors

In defence of millennial investors

THE URGE of the old to lament the folly of the young is as ancient as civilisation itself. “The beardless youth…does not foresee what is useful, squandering his money,” scowled the poet Horace, in 15BC. This year silver-haired Wall Street pros have tutted at the enthusiasm of youthful stock-pickers, who have taken to punting on markets in the lockdown.
Manic millennials tapping screens piled into Hertz-after it declared bankruptcy. They dabbled with derivatives and bid up shares in Nikola, an electric-lorry-maker that later admitted to letting a prototype roll down a hill during a “demonstration” because it could not have powered itself. It may seem as if the only lesson is how not to invest. Yet as we explain this week, young people are changing how finance works (see article) and often for the better.

Every generation leaves its mark, but those aged 56-74 today, known as baby-boomers, had an outsize impact on America’s capital markets. Thanks to solid economic growth, rising asset prices and fat pensions, they have accumulated piles of financial savings-about $600,000 on average, held in retirement accounts and other vehicles for shares and bonds.

The asset-management industry has been built around this mountain of money. Specialists run pensions, index providers such as Vanguard let you track the market while snoozing, and wealth managers offer personalised service and perks to the rich. No wonder the number of jobs in finance has risen by 31% since 1990.

At first glance the young don’t look as if they have enough money to reinvent Wall Street. Those under 35 have, on average, just $35,000 in financial assets, and those born between 1981 and 1996 own just 7% of all such assets in America, a far cry from the 26% share that boomers had amassed by a similar age and the 50% slice they now hold.

Having faced two economic crises in about a decade, the young are less likely than their predecessors to own a home or a car. Half of those aged 18-29 say they have a positive view of socialism, according to Gallup, a polling firm.

Yet much of this is about to change as the young approach their peak earnings and the boomers retire and die. In recent years the churn in investible asset holdings has been relatively small, at around $1.3trn every five years, or 5% of total wealth in America. This pace is expected to double in a decade or so, as boomers begin to hand wealth to their children-either in their dotage or in their wills. By 2042 millennials are expected to have inherited roughly $22trn.

The young are also early adopters of new technologies and investment philosophies. In America digital-payments networks such as Venmo and Zelle are dominated by younger users even as their elders still scribble on cheques. Huabei, a credit service launched in China in 2014 by Ant Group, a fintech firm, now has a vast army of users-the pioneers were young people who could not get credit cards or bank loans.

Younger American savers are happy using robo-advisers, which automate investment across a range of cheap index funds. As technology has cut the cost of trading, it has become easier and cheaper for them to trade assets actively, too. The leading adherents of the sustainable-investing boom that has gripped asset-managers are those aged 24-39.

More than two-thirds of these young savers say they are very interested in making a positive social and environmental impact with their investments, compared with about half of the general population.

Some big financial firms are alive to the coming shift. Last year Morgan Stanley bought Solium, a startup that manages stock options and equity as they vest, largely for young tech workers. Goldman Sachs purchased United Capital, an investment-advisory firm popular with young professionals.

But much of the financial industry, still drunk on the colossal windfall from the baby-boomers, is unprepared. If those firms want to stay in business, then instead of laughing as the new generation experiments with finance they should be taking notes.
#ANT 
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×