Millennials are wary of putting their money in the stock market, which could hurt their earning potential in the longrun. Only 33 percent of millennials said they own stock, compared with 51 percent of Gen Xers and 48 percent of Baby Boomers, according to a new poll Wednesday from Bankrate, the personal finance site.
It's true that younger people tend to have less money than their older counterparts. But the findings suggest Americans of all ages are relunctant to take a gamble on the stock market. Other recent polls suggest nearly 80 percent of millennials don't own stock.
About half of the respondents in the Bankrate survey said they do not invest and 48 percent said the reason for avoiding the stock market was not having enough money. About 25 percent of respondents said they didn't known enough about investing to follow through. Americans with a college education were more likely to invest than those with a high school education or less, likely because they had more money.
Millennials investing in the stock market tend to be older. About 44 percent of people ages 26-35 said they owned stock, while only 18 percent of people between the ages of 18-25 said the same. The survey of 1,000 adults was conducted in English and Spanish by Princeton Data Source from June 16-19. The margin of error was plus or minus 4 percentage points.
“Older millennials seem to be getting the message that the stock market allows for major financial gains if you start early,” Jill Cornfield, Bankrate.com’s retirement analyst, said in a statement. “Although there’s always some risk involved, building a portfolio at an early age allows for compound interest to grow and produce ample savings over time,” Cornfield added.
Younger people also tend to think they have time to invest, while financial advisors recommend starting early to build toward a strong retirement fund. Investing in the stock market is generally considered a smarter bet than putting your money in property.
"Since they're in their 20s they think they don't have to hurry to invest. Older generations are a little more educated. They were a part of the financial crisis so they've seen and experienced the down side of what the markets can do," Charlie Harriman, a financial adviser with Cloud Financial in Huntsville, Alabama, told Bankrate.