Despite perceptions, Millennials are Investment Savvy

By Elliot Bullman

Millennials are developing a unique perspective of markets and investment despite negative perceptions.

When it comes to establishing financial goals, millennials, individuals born between 1980 and 2000, set objectives, are aware of the risks that investment brings with it and recognise the importance of saving for their retirement.

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Despite the negative perceptions that have been established regarding this generation -as they live in a limbo between adolescence and adult life- their members are developing a unique perspective of markets and investment, according to the results of the Global Survey of Individual Investors of Natixis IM.

However, they need more support to achieve a state of financial security, says the study that gathered opinions of more than 2,400 millennials included in a global sample of more than 8,300 individuals with investable assets of more than $100,000 pesos.

The survey indicates that 64% of the millennials surveyed report that they have clear financial goals and 59% have a financial plan.

Taking into account the results of the survey, these are the beliefs and behaviors that can boost or end your financial and investment achievements:

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Goals are set, but in the short term

Although, the majority of the members of this generation focus on the objectives, they usually establish them in less than 10 years.

The investment perspective is fixed in the short term, since 64% said that the term horizon for their investments is five years or less, while 87% said that it is less than 10 years.

It is likely that this behavior reflects the current circumstances of his life, in which the expected events such as marrying or starting a family or a significant purchase, such as a new car or the first house, may be a few years away, said the report.

In this sense, 46% of the respondents also indicated that they need professional support to integrate financial and investment plans, as well as 28% said that they need advice with the financial foundations of their budget and debt management, and 28% in patrimonial planning.

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They are risk averse

Although millennials have high return expectations for their investments, many are not prepared to assume the necessary risk to reach their long-term assumptions.

The results of the survey indicate that 64% consider that it has financial security, less than the members of the previous generation known as Baby Boomers with 6%.

Six out of 10 said that if they had to choose, they would decide for security over the return on investment and 65% said that market volatility damaged their ability to achieve long-term goals.

Responsible for financing their retirement

Two-thirds of the millennials surveyed said they are saving for retirement through their employment, and three-quarters of them considered that the responsibility for financing retirement falls more and more on themselves, while six out of ten said that they will depend on government benefits for retirement.

Likewise, 73% said they have in mind an amount of money necessary for retirement and 64% have taken the step to determine what they will need in terms of income. However, only 58% have estimated what their expenses are.

"The first millennials have at least 25-30 years of work in the future before they can choose government retirement benefits in many countries, although we identify that many have clear expectations about the retirement stage," the study explained.

However, respondents also pointed out that it will be necessary to use other sources of income to cover their retirement, such as personal savings, savings funds, saving their partner or even the sale of a house or a future business.

In search of value investments

The social meaning of millennials when generating investments is very present. The survey revealed that the members of this generation consider it important to invest in companies that reflect their personal values, that they do a social good and generate a positive environmental impact while having solid standards in their commercial operation.

More than eight in 10 said it is important that the companies in which they invest act ethically, while three-quarters said they want to invest in companies with a positive social impact and approximately the same number say they are concerned about the environmental record of the companies in which he invests.

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