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A Millennial's Portfolio Looks Nothing Like Their Fathers' Did!

A Millennial’s Portfolio Looks Nothing Like Their Fathers’ Did!

retirement investment

As times change, our habits change; and the truth is that the way we’re investing our retirement nest egg is changing. As a millennial, I find it interesting to talk to my father, grandfather, and other people in their generation about what they did to invest for retirement. The answers they provide are far different from what I see in my own portfolio and from others in the millennial generation. So, today we’ll chat a bit about how our investment strategies are far different than what we used to see in the past, and how, in my opinion, it’s a good thing!

Going Back To What Dad Taught Me

Luckily for me, I grew up in a family that had a strong focus on finances, investing, and making sure that you were comfortable in the future. So, at an early age, my dad started talking to me about retirement. Mind you, at 13 years old, I really didn’t care. All I wanted to do was grab my skate board and go thrash some rails! However, I’m glad we had those talks because the lessons really did sink in. Of all the conversations we had on the topic, the lesson that sunk in the most was simple…

“You have to manage risk in anything you do in life son…even when it comes to investing for your future…”

While he would package it in several different ways, the story of risk management for retirement investments always came with the same bottom line. 30% of your investment dollars should go into government bonds for security, 30% in liquid alternatives like gold, and 40% in equities for growth. With this basic 30/30/40 rule, risk was limited and overall, my investment dollars would grow.

I Listened, But My Strategy Is Still Different!

Don’t get me wrong, I cherish everything my dad taught me growing up. He made me the man I am, and for that, I’m ever-thankful! However, dear old dad’s style of investing just isn’t right for a guy like me; and if you ask most millennials, they will feel the same. The reality is that we know that our 20’s and 30’s are the years that give us the most leverage in the market; the most important investing years of our lives. With that in mind, we intend on being aggressive! We want growth, we want to retire early, and we want to do it comfortably! Sound familiar?

How We Get the Growth

The bottom line is that these days, investment strategies have changed overall. Millennials exhibit a much higher level of comfort with risk, we focus on solid growth, and we listen to our peers. Here are some major differences in the way we invest today…

  • % Of Equities In Portfolios – When your dad invested, the average person had between 30% and 40% of their portfolios in equities. However, by most recent estimates, millennials tend to have around 85% of their assets in equities; insinuating a heavier focus on growth and less concern with risk.
  • Short Term Trading – Short term trading is becoming more and more popular w. New strategies are being created every day for analyzing short term market trends and capitalizing on them; and millennials are proving to be very successful in the process.
  • We Watch Others – While our parents may have done hours upon hours of research when choosing where they were going to invest, we use social trading environments to get ideas from those already making money in the market. Sure, we spend time researching, but not nearly as much!

Why This Is a Good Thing

The reality is that the world of investing is evolving for the better. Comparing my portfolio to my fathers, I can see that his retirement would have been much more comfortable if he was more aggressive with regard to growth. Also, even he admits that it’s “pretty neat” that “kids” like us have created systems that allow us to follow other traders, share ideas, and create strategies together. The reality is that millennials are making earning money in the stock market and investing for retirement a more reliable process.

Do You Know Of Any Other Ways Investing Is Different For Millennials?

Let us know in the comments below!