Millennials were already skeptical of buying stocks. A recent Bankrate.com survey found just 26 percent of people under 30 own them—in part because they don't know much about the market or think stocks are too risky. The massive selloff Monday, which saw the Dow Jones industrial average plunge 1,000 points before closing down nearly 600 points, probably didn't do much to change that.
But advisors caution millennials that avoiding equities could be riskier than staying on the sidelines, since stocks tend to generate higher returns over time than more conservative investments. (Despite the recent volatility, the Dow is still up more than 1,100 percent over the last 30 years.) In fact, this could be a prime time for young investors to jump into the stock market.
"It's a good buying opportunity," said Victoria Fillet, certified financial planner and founder of Blueprint Financial Planning in Hoboken, New Jersey. "We've been waiting for a correction, and when you get a quick and intense market correction it is much healthier than a slow grind down."
It's like a clearance sale.
That's especially good news for millennials. While a dip this low tends to scare people, buying when stock prices fall means you get more bang for your buck. It's as simple as it sounds: When a stock's price is down, the same amount of money allows you to buy more shares. "You're buying whatever you're buying at a better price today than what it was last week," said Kevin Gahagan, principal and senior advisor at Mosaic Financial Partners in San Francisco.