Jun 27, 2017

Chart: How Are Millennials Investing Their Money?

Hat tip to The Reformed Broker for this thought-provoking chart which will get your students thinking about the importance of asset allocations:

Questions for students:

Note: Equities are synonymous with stocks, fixed income means bonds, think of cash as a savings/checking account and alternatives would be alternative investments like hedge funds or private equity.

  • What are the top four assets that millennials are investing in?
  • Now rank the assets from highest to lowest historical return. What asset class has had the highest returns? 2nd highest? 3rd highest? 4th highest?
  • In analyzing the chart, do you think that millennials are making wise decisions when it comes to investing their money? Why or why not?
  • Do you think a millennial with this investing strategy could earn 10% per year?  What do you think would be reasonable?
  • Before deciding on how a young person should invest, what would you want to know about them?
  • Excluding alternatives, what do you think is an ideal way for a young person to invest? What percentage in equities (stocks)? What percentage in fixed income (bonds)? What percentage in cash?


See what a robo-advisor would recommend as an asset allocation for your students…have them try this NGPF Interactive: Would You Trust a Robot to Make Investment Decisions?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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