Surprise! Gen Y Investing in Stocks After All - Kapitall Backstage

Now that the baby boomers easing into retirement, there's a lot of speculation about the next generation of investors, and what to expect from them.? The general assumption has been that they're fleeing from stocks, and the trend will only continue.? So it may surprise you to know that in reality, young investors are putting more assets in stocks than their same-age counterparts a decade ago.?

According to a report issued by the Employee Benefit Research institute, over 80% of 20-something investors have 60% or more of their 401(k) assets in stocks, up from 70% of them back in 2000.?

Of course, the reason may have less to do with intent than circumstance.? It's only since 2006 that employers have been able to auto-enroll new employees in 401(k) plans, hiking enrollment numbers--especially among the newest, youngest recruits.? And that same law also allowed employers to make target-date funds, which start out heavy on the stocks and reallocate to "safer" investments over time.? ?

But still, according to a recent survey taken by TDAmeritrade Holding Corporation, Generation Y may not be quite as pessimistic as was previously thought: "nearly half (46%) of investors age 18-34 expect to increase the amount of money they invest in the stock market in 2012, compared to 20% of those age 35 and older." And 56% of those surveyed within the 18-34 bracket said they felt "optimistic" about the state of the stock market.? Fred Tomczyk, president and chief executive officer of TD Ameritrade, opines that "as investors get closer to retirement, they tend to become more cautious, and what's going on in the economy right now has exacerbated those feelings."? However, "younger investors tend to be more optimistic because they have time on their side."

With so much market volatility, it's hard to say how long young investors will continue the trend toward stocks.? But Wall Street will be keeping its fingers crossed that they do.

by Alicia Sellitti

Source: http://www.backstage.kapitall.com/kapitall-company-blog/2012/2/10/surprise-gen-y-investing-in-stocks-after-all.html

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