Personal Finance

This group of wealthy investors has the lowest allocation to stocks

Key Points
  • Millennial investors with at least $3 million in investable assets increased their exposure to stocks and cut back on their cash last year, a new survey finds.
  • Despite those moves, millennials still have the lowest allocation to stocks compared with other generations.
Ariel Skelley | Getty Images

Wealthy millennial investors have the lowest allocation to stocks compared to other generations.

High net worth and ultra-high net worth members of the millennial generation — those who were born between 1981 and 1997 — also have the highest exposure to alternative investments, according to a new survey from U.S. Trust.

But wealthy millennials have ramped up their stock allocations in the past year to 46 percent from 25 percent, according to the survey.

They also cut their cash as a percentage of their total portfolio to 21 percent from 47 percent.

The online poll surveyed 892 high net worth and ultra-high net worth investors ages 21 and up who have $3 million or more in investable assets excluding their homes.

Chris Hyzy, chief investment officer for Bank of America Global Wealth & Investment Management (Merrill Lynch and U.S. Trust), attributes those changes to several factors.

“The market did outstandingly well in 2017, which gives them this feeling of comfort,” Hyzy said.

Members of this generation are also getting older and are likely having more conversations with financial advisors about how to invest, Hyzy said.

The survey was conducted in February, when the markets were just beginning to usher in more volatility.

“Right now, we just happen to be in a daily, weekly environment of various trade fears and tariff negotiations, which cannot be cleared up in one day or a week,” Hyzy said.

How worried investors are about those day-to-day market fluctuations depends a lot on whether they have a long-term plan. Those who are invested but do not have a specific plan as to why they are investing are the ones that are most nervous, Hyzy said.

"Those who have defined goals, they are less worried about the day to day, week to week, month to month, even yearly movements in the investment markets," Hyzy said.

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