The last month has been nothing short of a rollercoaster ride for the markets. Last Tuesday, the Dow was down nearly 3 percent after making a modest effort to recover from its one-thousand point loss the week before. If you are like most Millennials, you could not begin to tell me why this phenomenon occurred. Actually, I take that back. If you are like most Millennials, you could not tell me what the markets have been up to since… ever.
But is this really our fault? I mean, Millennials have lived through some of the worst economic times since the Great Depression. First there was the ‘Dotcom’ crash of 2000 where the Nasdaq lost 78 percent of its total value. This was followed by the Great Recession of 2007-09, which has not only shattered consumer confidence to this very day, but helped peak the unemployment rate to 10 percent in October of 2009. Then there were the bailouts of the financial institutions where executives took hundreds of millions of dollars in bonuses, while simultaneously laying off thousands of employees. And, finally, there was the recent roller coaster of market activity in the past few weeks fueled by an unstable Chinese market.
These financial headlines across the country have been heavily weighted to the side of negativity in the past fifteen years. So, it is no wonder Millennials feel somewhat apprehensive towards the stock market. A recent study in May conducted by Capital One ShareBuilder showed that a staggering 93 percent of Millennials surveyed distrust the market. But, could this be a case of apathetic knowledge towards investing in general? Probably, yes. Why should we even care? The flurry of negativity surrounding the stock market that has dominated headlines in anything but a warm, cozy greeting to the world of investing. Instead, Millennials were greeted by the worst economic downturn since the Great Depression followed by an eminently non-existent job market to coincide with our thousands of dollars in student loan debt.
So, maybe the full picture is not being taken into account when analysts and experts proclaim Millennials’ fear of investing money in the stock market. Maybe we are scared to even learn about the stock market in the first place. With its tarnished reputation, the world of finance and investing offers little incentive to even look into nowadays. The fact that we have lived through one financial catastrophe after another has not helped the cause, and the media firestorm surrounding these events has only amplified our continued investing silence.
Let me be clear, I fully support the media’s coverage of these incidents, and I believe the financial sector has given people plenty of reasons to not trust them with their money. We need to realize that despite everything that has happened in the last fifteen years, they have shown us that there are plenty of reasons to trust them too. For instance, stocks have returned over 200% of investors’ money since the lowest point of the recession in 2009, and a readily slowing deficit and falling unemployment rate are positive indicators towards a healthy, growing economy.
I digress. While it disheartens me when people my age say ‘Ew!’ or ‘Gross!’ when I tell them I am studying finance, I understand and can empathize with them when they say it. It is hard to trust a system that we have seen so much negativity surround for our entire lives. Even hearing the words ‘finance’ or ‘investing’ or ‘stock market’ is off-putting for so many of us. While class after class of Millennials graduate college with even more student loan debt, our misconceptions about the stock market continue to persist leaving us with no incentive, reason, or knowledge to invest and make us one damn fearful generation.
