The stock market is down more than 10% in the last few weeks, raising the prospect that millennial investors, who just a few days ago were bragging about their 401(k) balances on the Internet, could face their first real bear market as investors.
For millennials, who witnessed the 2000 tech wreck and the 2008 financial crisis in their youth, the market’s plunge may seem like a tough break.
But in reality, long-term investors saving for retirement — especially young workers decades away from leaving the workforce — might as well be cheering for the stock market crash.
If history is any guide, this momentary drop in equity prices will only mean that the retirement accounts of young investors who stay the course will be that much larger in the future. Full Story
Watching the wild swings in the stock market has been a heartbreaking experience for Jasmine Okougbo, who started investing only last month.
Ms. Okougbo, 26, a business operations manager in Tucson, has an individual retirement account set up through her company and shares she got from her parents for her birthday. In one week, the value of her investments sank 65 percent.
“I don’t think I will be buying or trading on the market again anytime soon,” she said. “I still don’t think it has hit me how much I lost so quickly.”
For many millennials, the recent stock market gyrations have been a painful lesson in volatility that is being driven by fears that inflation and interest rates could rise faster than expected. Many have retreated from the market into savings accounts.
Twitter feeds quickly filled with teary, wailing GIFs and heart emoticons cracked in two — pithy punctuation about anemic 401(k) accounts being whittled down to wisps. Many young investors bemoaned the misfortune of equity portfolios shriveling up weeks after their cryptocurrency holdings also began deflating. Full Story
Jared Smith represents a new breed of millennial: someone who saw the financial crisis unfold during his formative years but is now ready to step back into the arena and take some risk.
The 31-year-old New Yorker is a big believer in stocks. While that seems like a no-brainer for a market that has skyrocketed 325 percent since the crisis lows, investors in general and millennials in particular have been afraid of equities, worried that another crisis could sneak up and wipe out all those gains.
Not Smith, who has taken a slice of his trust fund and put it to work on Wall Street. Full Story