A survey was commissioned by the BMO Wealth Institute to ask millennials, generation Xers and baby boomers in the United States about their attitudes and behaviours around saving and investing (conducted by ValidateIt Technologies Inc. with an online sample size was 1,006 Americans aged 18–71).
Its main conclusions were:
- The number one financial goal for which people are saving and investing is retirement, noted by the majority (59%) of all the individuals surveyed.
- People top three saving or investing options were short-term savings options that include putting the money aside to decide later (22%) and accumulating funds in a term-deposit or savings account (19%).
- A high proportion of respondents indicated a preference for investments that rely on the expertise of professionals, such as managed investment portfolios (33%), and mutual funds or Exchange Traded Funds (29%).
- The use of a portfolio approach was more frequently found among baby boomers and generation Xers than in millennials, as evidenced by a greater use of managed portfolios of investments. However, millennials did favour the use of mutual funds and exchange traded funds, and managed portfolios, over investing in individual stocks (the portfolio approach is one that spreads investments out over a number of areas and builds a more diversified portfolio – don’t put all eggs in the same basket -, owning a greater variety of securities and including regional representation beyond locally known companies.
- The majority chooses to work with the assistance of a financial professional, with 28% using an advisor at a financial institution, 23% investing through an independent advisor and 18% investing with a full-service financial professional.
- Most of the people surveyed had positive feelings about their investing experiences.
- One of the main reasons for not saving or investing was that these disciplines were too complicated. Almost one in five millennials (18%) cited this reason, more than double the frequency among baby boomers (at just 8%).
- As to the factors that can make their personal investments perform better, people said buy-and-hold strategies (32%), adding to investments on a regular basis or making additional savings (30%) and relying on the advice of a financial professional (28%).
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