Millennials a ‘Lost Generation of Investors’: MFS

A new survey from MFS has found that the younger generation’s definition of long-term investing is quite short, and that these “recession babies” invest more conservatively than even their grandparents.

“The data confirm that we have a lost generation of investors,” said William Finnegan, senior managing director and head of Global Retail Marketing for MFS, in a statement releasing the MFS Investing Sentiment Insights survey. “The impact of 2008’s Great Recession has had a deep-seated secular impact on millennial investors. Their grandparents are more aggressive investors.”

The survey found that 40% of millennial investors — adults under 34, also referred to as Gen Y — define long-term investing as less than five years, the shortest holding period of any age group polled.

MFS calls the survey results “striking” given that millennials have a much longer investment time horizon than older generations.

The poll found that 30% of millennials consider themselves short-term investors, and one quarter of them say their primary goal is protecting principal — something that’s traditionally more common among older folks. The survey also reveals that millennials hold more cash on average, at 25.8%, and fewer U.S. equities, at 30.5%, than older generations.

Calling millenials “recession babies,” Finnegan notes that given their time horizon, “millennials will be all right once the economy improves, but reality shows [they] don’t trust the markets and have embraced a conservative approach that could prevent them from reaching their long-term financial goals.”