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 confirms 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 percent 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 percent 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 percent, and fewer U.S. equities, at 30.5 percent, 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.”