Fear is not the only reason why generation are not investing

Is fear the only factor? Let’s analyse.

15:04 14 August 2014

Due to the horrific economic slump when they were growing up, Millennials are now scared of investing in the stock markets. The recent graduates we have today witnessed the biggest financial crisis ever, that left many of their parents jobless and grappling with huge debts. However, fear is not the only reason for the lack of young blood in the stock markets; financial factors are also to blame. Generation Y have massive financial burdens mainly in the form of student loans according to a research conducted recently.

 

The various happenings that unfolded as they were growing up can help explain Millennials’ apparent conservative financial tendencies. Some key events in their childhood include the Internet crash, the housing bust, the financial recession of 2008, and they saw their parents continuously grappling with financial assets and security crashes. From then on, millennials have been wondering how they will ever retire.

 

Most of these graduates were derailed early in their careers due to the economic meltdown. Given the economic situation, they list their current major concerns as being able to pay monthly bills as opposed to saving and investing. Many millennials follow this approach in which they regard investments in the stock market and other forms as not worth the risk involved.

 

According to the results of the research, many millennials are either ‘not very confident’ or ‘not at all confident’ with the stock markets. They even mistrust financial professionals and don’t believe that financial planners are taking care of their best interests. Similarly, millennials who consider investing in the stock market regard it as a short term investment. They regard a five year investment as a long term investment. This approach tends to make the stocks even more unstable because short term stock investments are subjected to a higher degree of instability.

 

The job market has not bounced back to pre-recession standards either. With many millenials still being unemployed or underemployed, and most of them having to service their student loans, things are not looking bright for them.