Cogent’s “Emerging Investor Trends” study looked at affluent
(having at least $100,000 in investable assets) Generation Y/Millennial and Generation X investors. Linda York, vice president of
Cogent Reports, tells PLANSPONSOR, “More Millennials feel optimistic about the
investing environment (47%) than their Gen X counterparts (26%). In terms of
overall financial priorities, for the Gen Xers it’s saving up for and funding
their retirement. For Millennials, their priorities are saving to make a major
purchase or just saving in general, though not with a specific aim of
Millennials also have shorter-term goals when it comes to saving,
she says, such as paying off debt or purchasing a home.
Massachusetts-based York adds, “Forty-four percent of Millennials are investing
in low-risk investments, which is a higher percentage than their Baby Boomer
counterparts. Gen Xers, on the other hand, seem to have a higher tolerance for
investment risk. Almost half (43%) are investing in moderate-risk investments
and over one-quarter (27%) are investing in high-risk investments.” Part of the
difference, she explains, is that since Gen Xers are not saving for
shorter-term purchases, they have a longer time horizon to work with and more room to recover
from risk-generated losses.
Another difference between Millennials and Gen Xers is where
they are putting their money. More than one-third of Gen Xers (36%) are
investing their savings in employer-sponsored retirement plans, allocating the
most they can to them, while more than one-quarter of their Millennial counterparts
(26%) are keeping their assets in bank accounts.