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Millennial investors have been called many names, from risk-happy speculators to overly cautious skeptics. But if you look past the stereotypes, a more interesting picture emerges: millennials are reshaping the way Americans invest in ways that all generations can learn from.
This is a generation that came of age during extraordinary economic whiplash. “Millennials lived through both the dot-com bust and global financial crisis during their formative years,” says Teresa Greenip, senior manager in Wealth Management at Aspiriant. “Many witnessed widespread economic disruption, bank failures, mass layoffs and tumbling retirement and investment account balances firsthand … while they were just starting to invest.”
That early exposure left many millennials skeptical of traditional financial institutions, but also unusually motivated to take control of their own financial futures. In doing so, they’ve adopted habits that other generations may want to borrow, adapt, or, in some cases, avoid.
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Here are the biggest ways millennials are investing differently from other generations, and what we can take away from the millennial approach.
1. Embrace tech to automate and accelerate investing
Millennials were the first generation to come of age and enter the workforce with mobile investing as the norm. “Millennials are extremely tech savvy and tech dependent,” Greenip says. “So it’s no surprise that millennials are the largest holders of cryptocurrency and have embraced technology-forward investment platforms, including robo advisers and budgeting apps.”
Fintech has lowered the barriers to entry for investors, making it easier to start investing with small amounts and automate the entire process. This democratization of investing is one of the clearest positive shifts millennials have championed.
Millennials started investing earlier than previous generations, on average, and as a result, “it’s likely many won’t have to play catch-up when it comes to hitting retirement savings goals,” says Steve Azoury, a chartered financial consultant and owner of Azoury Financial.
2. Learn how to manage the noise
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The same technology that empowers millennials could also be their kryptonite if not managed carefully.
“Frictionless trading paired with 24/7, real-time, rolling news feeds, means that millennial investors are constantly tempted to react to every headline,” Greenip says. “With investing, however, short-term, emotion-driven decisions can be particularly damaging, making discipline more important and more difficult than ever.”
This is where millennials’ experience becomes a cautionary tale. The ease of trading combined with the inundation of social media commentary, influencers and meme-stock culture, can tempt investors into impulsive decisions.
So while it’s good to be an informed investor, don’t let misinformation or too much information drive you to bad decisions. Maintain your long-term perspective and remember that what happens in the market today will likely be long forgotten decades from now.
3. Don’t be afraid of risk
Millennials’ skepticism of traditional financial institutions hasn’t made them risk-averse. Quite the opposite. They’ve embraced high-risk investments such as cryptocurrencies, thematic exchange-traded funds (ETFs) and alternative investments.
Indeed, crypto assets make up at least one-third of portfolios for 62% of millennial investors, according to a study by the World Economic Forum.
This risk appetite can be beneficial, especially for younger investors who have time on their side. However, it can also be taken too far.
Cryptocurrency can be a fun way to gamble with extra savings, but it should not be one-third of your retirement portfolio. As the World Economic Forum puts it, millennials’ appetites for risk make “addressing gaps in financial education … increasingly important, especially for matching portfolio allocation with their optimal risk-return profiles.”
4. Plan for multiple income streams
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“Millennials often feel Social Security won’t survive, or if it does, it won’t be as much as it should be,” Azoury says. “So, they’re building their own savings utilizing technology to manage numerous investment accounts.”
This has led millennials to plan for multiple streams of income now and in the future. The “hustle culture” doesn’t shy away from diversifying their wallets or accepting that their financial future is their responsibility.
Millennials understand that “the ‘cradle to grave; mentality is over, as people are living much longer and employers cannot afford to pay someone 30 to 40 years after retirement,” Azoury says. The moral of the millennial story is to plan early and plan long.
5. Invest with your values
One of the most striking generational shifts is how strongly millennials align their investments with their personal values.
The World Economic Forum found that 70% of millennials pick a financial institution based on how it aligns with their personal values compared to only 51% of Baby Boomers. That preference shows up not only where they bank, but also in how they invest, with a much higher interest in environmental, social and governance (ESG) investing and sustainable investments.
This isn’t just about strategy. Values-aligned investing, especially ESG, can help you identify companies with durable business models, forward-looking leadership and lower long-term risk.
So yes, as millennials are showing us, you can do good for both your portfolio and the planet.
The bottom line: discipline + technology = a modern investing blueprint
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Millennials aren’t perfect investors — no generation is — but they’ve embraced tools and habits that make investing more accessible and, in many cases, more effective.
“Ultimately, successful investing comes down to discipline,” Greenip says. “Investors can learn from millennials by leveraging technology where it is truly most beneficial: using apps and automation to consistently save and invest. At the same time, they should recognize that long-term success requires tuning out the noise of the 24/7 news cycle and sticking to a well-thought-out plan.”
That combination of tech-enabled convenience and old-fashioned discipline may be the most valuable lesson millennials have to share.