They’re fond of smashed avo breakfasts and renting for life but Millennials are also displaying an investment attitude so conservative it hasn’t been seen for five generations, says a US super expert. Chicago-based Sabrina Bailey, the global head of retirement solutions for Northern Trust Asset Management, says the under-40s, prefer keeping their cash in safe, low-yielding investments rather than taking a riskier growth option in their super savings.
“We’re seeing Millennials with the same conservative outlook as those born in the Great Depression, with 80 per cent preferring capital conservation over growth assets,” she says.
“There’s a lack of trust with government and financial institutions. Millennials saw the tech downturn in the early 2000s and the GFC and the impact to their parents. That’s causing the conservativeness.”
But CMC Markets chief strategist Michael McCarthy argues the conservative Millennial runs counter to his experience of younger Australian investors who had more exposure to share trading at their age than previous generations and had adopted disruptive new platforms to gain access to equities such as fractional investors Robin Hood and Acorn. “This is the generation that has been the most prominent in trading cryptocurrencies. It doesn’t get any more high risk than that,” he said.
But he said the scars from the GFC were still very evident, which may be influencing Millennials’ long-term attitudes.