How Different Generations Invest

How Different Generations Invest

September 10, 2020

Each generation comes of age during different economic circumstances, and this can have a major impact on their later money habits. Financial professionals have identified some investing tips for certain generations that can help make their portfolios more efficient. Learn more about the investment strategies most commonly used by Boomers, Gen X-ers, Millennials, and members of Generation Z—and how you can make them work for you.

Boomer Investing Habits

Baby Boomers, or those who are born between 1946 and 1964, are mostly retired or getting close to retirement. But while a financial professional will often recommend moving retirement funds out of risky assets like stocks and into bonds or money market funds, Boomers haven't heeded this advice. In fact, a full eight percent of Boomers are entirely invested in stocks, while nearly half of all Boomers have a riskier allocation than analysts recommend.1

With the recent market run-up, this strategy has paid off in a big way—the number of 401(k) millionaires is at an all-time high, largely due to the number of aggressively invested Boomers. But if (or when) a downturn happens, those with too much stock exposure and no W2 income could be hurt.

Gen X Investing Habits

Members of Generation X, or "The Forgotten Generation," are often overlooked in discussions of investments or personal wealth. But these investors, born between 1965 and 1979, are actually more conservative than Baby Boomers when it comes to their fund choices.2 Many Gen X-ers began investing in the late 1990s and early 2000s, only to find, a decade later, that a slumping stock market meant their balances barely budged.

Gen X-ers are also more likely than Millennials to seek out the help of a financial professional. But because they're in their prime earning years, with some of the older Gen X cohort nearing early retirement, they expect quick, accurate answers from those who are managing their money.

Millennial Investing Habits

The oldest Millennials are nearing 40, their prime earning years, while the youngest members of this generation may still be in college. Like Gen X-ers before them, Millennials are more conservative investors than one might expect. A full 30 percent of Millennials surveyed replied that their favorite investment was "cash," not stocks, real estate, or bonds.3

Millennials are largely responsible for the rise in socially responsible investing, seeking out funds and companies with certain environmental, governance, or social goals. And with an eye toward simple investments like target-date mutual funds and exchange-traded funds, Millennials tend toward the DIY route when it comes to directing their retirement funds. 

How to Improve Portfolio Efficiency

Regardless of which generation you were born into, you can draw inspiration from some of the investment strategies used across the years. Millennials can take advantage of their long investment horizon by looking into some more aggressive stock funds. Meanwhile, Boomers may want to borrow a page from the Millennials' book by moving assets to cash to protect against market drops. And Gen X-ers can show both these generations the importance of having a responsive financial professional.


Important Disclosure Information

The comments above refer generally to financial markets and not Bazis Young portfolios or any related performance. The content of this article should not be considered financial advice. The article is not intended to  offer specific investment recommendations and  is general in nature and should not be considered a comprehensive review or analysis of the topics discussed. This article is not a substitute for a consultation with an investment adviser in a one-on-one context whereby all the facts of the attendee’s situation can be considered in its entirety and the investment adviser can provide individualized investment advice or a customized financial plan. Opinions expressed are current as of the date shown and are subject to change. Past performance is not indicative of future results and diversification does not ensure a profit or protect against loss.  All investments carry some level of risk including loss of principal. Information or data shown or used in this material was received from sources believed to be reliable, but accuracy is not guaranteed. This information does not provide recipients with information or advice that is sufficient on which to base an investment decision. This information does not consider the specific investment objectives, financial situation or need of any particular investor and may not be suitable for all types of investors. Recipients should consider the content of this information as a single factor in making an investment decision. Additional fundamental and other analyses would be required to make an investment decision about any individual security identified in this report.

Bāzis Young Investment Group, LLC is a registered investment adviser with the Securities and Exchange Commission.  Registration as an investment adviser does not imply any level of skill or expertise. Any discussion of specific securities is provided for information purpose only and should not be deemed as investment advice or a recommendation to buy or sell any individual security mentions or to allocate assets in any manner discussed.

No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

See CNBC, "Baby boomers, heavily invested in stocks, are putting retirement savings at risk: study," by Annie Nova, March 20, 2019

See National Association of Plan Advisors (NAPA), "The Forgotten Generation: Understanding Gen X Investment Habits," by Ted Godbout, August 28, 2019. 

See The Balance, "Millennial Investing Habits You Can Learn From in 2019," by Tim Lemke, updated June 25, 2019.

Tracking #1-919989 (exp. 12/21)