According to a recent article on Yahoo Finance, millennials are beginning to put their money into the stock market.
A survey done by popular financial service company, E-Trade, shows that about one third of millennials are ready to make a change to their portfolio. This statistic was in comparison to 19% of generation X participants and 9% of those over 55 years of age.
I'm sure you're wondering what exactly has influenced this sudden investing surge among millennials, and there are a couple of factors that are responsible.
The first of these factors is none other than the stock market itself. The article notes that since the presidential election last November, the stock market has gone up about 18% and has caused very little concern over the past nine months.
The article also makes note of how interesting the millennial's seemingly conservative nature has been toward investing given the fact that they were around for the financial crisis of last decade. E-Trade’s VP of investment strategy, Mike Lowengart, noted that there's a flip side to millennials conservative nature: They've also seen a recovery after the financial crisis. “The lesson of cyclicality is likely not lost with these folks,” Lowengart added. “They may also have gained the wisdom that being invested for the long-term is a better bet than timing the market.”
Another key contributor to millennials proactive investing is the simple fact that with being a younger generation they have more time to ride the ups and downs of the market. “Millennials have the longest runway. For this set, market FOMO (fear of missing out) worse than losses incurred by a correction,” said Lowengart. “With a time horizon spanning decades, they know they have time to make up any losses should a correction occur.”
With that being said, this FOMO may be a good approach for millennials to take. The fact is, staying out of the stocks and risk would make saving up for retirement much more difficult.
Besides saving for retirement and having time on their hands, there also other major advantages young people can find through investing in the stock market. As we all know, debt has been a major problem for many recently graduating college students. By investing in the stock market, these recent grads can provide themselves with a source of growing income to help pay off whatever debt they may have.
Also, there's always potential for an unplanned emergency. Having an investment account will again give you a source of funds that you'll have the opportunity to use in case of any sort of crisis.
Clearly, there's plenty of reasons for anyone to start investing, and of course, the sooner you start, the more you can end up with.
Now perhaps you're saying to yourself; “Well I want to start investing, but golly gee wiz I just don't know where on earth to start!”
No worries, there are plenty of options.
A notable place is an app known as Acorns. How this app works is you link your bank card and say you make a purchase for $4.32, Acorns will round up to the next highest dollar ($5.00) and invest the difference (which in this case is $0.68...yeah, I know math!) for you. It's certainly a simple and quick way to embark on the journey of investing.
For even more help getting started, take a look at this article on investopedia.com that provides in depth tips and information on the aforementioned mystical world of investing.
