Millennial investors are the most fiscally conservative generation since the Great Depression, a study released by UBS on Monday shows.
Though 21- to 36-year-olds describe their risk tolerance as either conservative or somewhat conservative (34 percent), their average asset allocation is extremely conservative, with the average portfolio dedicating 52 percent to cash versus 23 percent cash for other investors, the study finds.
“Millennials seem to be permanently scarred by the 2008 financial crisis,” said Emily Pachuta, head of Investor Insights, UBS Wealth Management Americas, in a statement. “They have a Depression-era mindset largely, because they experienced market volatility and job security issues very early in their careers, or watched their parents experience them, and it has had a significant impact on their attitudes and behaviors.”
A good number of millennials, 45 percent, see saving money as crucial to success versus 39 percent of other investors. Most, however, do not see long-term investing as important, 28 percent vs. 52 percent for other investors.
In terms of where to turn to for investment advice, only 14 percent of millennials point to advisors, while 40 percent of other investors say they are open to working with professionals. In contrast, 62 percent of millennials are likely to turn to a partner or spouse for advice versus 55 percent of other investors.