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What Happens When Millennials Meet Market Mayhem?

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Play the stock market, they said. It’ll be fun, they said.

But the recent volatility in the market may have some millennials ready to get off the ride—or at least ask it to slow down.

Millennials typically consider themselves cautious investors. Survey data from Legg Mason cited in a recent New York Times’ story shows only about one-third of them own stocks, and more than 80% of them consider their investment strategies to be “conservative.”

Despite all that, millennials’ expectations may be a little too bullish.

AMG, an asset management company, found the typical millennial investor expects an average annual return of 13.7% compared to the 7.7% return expected by Baby Boomers, the Times’ story says. That bullishness could only have grown after the market began this year with its best January in three decades.

All of which left many of them unprepared for a 1,800-point plunge over a two-day period earlier this month that hemorrhaged thousands from their portfolios.

At least one millennial the Times spoke with said she’ll be hesitant to invest again, but others planned to wait it out and allow the market to correct itself.

Many are finding cryptocurrency alluring, the Times reported, and they are often turning to robo-advisers as many believe they aren’t yet investing enough to warrant a professional adviser.

Not having a relationship with an adviser—who could have talked them off the ledge, so to speak—may have made this month’s plunge seem even scarier.

Of course, none of this is necessarily specific to millennials.

Most of us have experienced the shell-shock of looking at our 401(k)s or IRAs after a particularly bad week on Wall Street. But we know that those losses are typically regained over time if we’re patient.

The good news for millennials is that they have more time than us Gen-Xers and Baby Boomers to build back any money they lost. If they’re patient, the same market that knocked them for a loop this month will likely help them get back up.


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