Most Millennials Are (Appropriately) Loaded Up on Stocks: Vanguard

“Younger investors are benefiting from balanced, diversified portfolios, and shifting away from the extreme equity allocations that we’ve witnessed in the early years of previous generations.”

The paper said that although most millennials hold age-appropriate allocations, a growing number hold zero-equity portfolios — 19% in 2017, seven percentage points higher than in 2012.

One reason, according to the research, may be bear-market experience that has caused some investors to adopt conservative portfolios. In 2007 and earlier, only 10% of millennials held zero-equity portfolios, while 33% held all-equity portfolios.

During and after the crisis, 22% of millennial investors held no equities in their portfolios, and just 14% held all equities.

Vanguard researchers suggested that inertia could also account for zero-equity portfolios, as new investors hesitated to put money in the stock market. A third of millennials who opened their first account in the past year held no equities, for example, though this figure drops sharply as tenure increases.

Yet another reason, they said, could be short-term goals, such as a house purchase.

Other recent research found that while millennials have age-appropriate attitudes toward asset allocation — 66% agreeing that the more time they had until retirement, the more aggressive they could be with their investing strategy — 66% of millennials surveyed felt safest keeping most of their savings out of the market or putting it in real estate.

— Check out Millennial Homebuyers Could Be Making a Big Financial Mistake on ThinkAdvisor.