Some interesting, perhaps troubling, results from the Merrill Lynch Quarterly Affluent Insights Survey this morning.
Younger investors are more risk averse than older investors. Those in their 20s and 30s are more risk averse than the 40s and 50s demographic because they been burned twice in the last decade.
Older investors are more concerned about inflation, where younger investors aren’t as concerned because they haven’t experienced it [inflation] yet.
I don’t particularly find these findings all that surprising because:
I’m a late 1970s Gen X’er and I get a bitter aftertaste in my mouth when I speak/write about the Bubble Decade. Which is why I’m looking at basic low cost index funds for my retirement accounts to save as much money on investing fees as possible while getting a ROI equal to the broad market index. I’m also looking into alternative investments like Peer to Peer Lending for a more consistent return in the 10% range, which I was quoted (I say this sarcastically because I was never guaranteed anything), by financial experts way back in 1999 saying 10%+ was the average annual ROI based on historical stock market performance.
Not that many people, particularly young people, understand how inflation affects them. Mark Dice proved this by convincing a majority of random Americans on the street that 100% inflation was good for America by signing a ridiculous fake petition.
Older investors want to make their money back. I’ve spoken to several older investors who went from talking about early retirement to might not being able to retire at all. So not surprisingly, they want to increase their risk in order to boost their account balances before punching their final time sheet.
So whats your take on the survey results?
Do you have more anxiety about investing in the markets than you did 5 to 10 years ago? Are you holding money back, or are you calling the skeptics a bunch of wussies and staying the course?