https://www.financialsamurai.com/how-hi ... breakdown/
What's more interesting is the breakdown between generations. Equity portion has increased for both Gen Xers and Millenials from 25% in 2017 to 46% in 2018 for Millenials, and 45% in 2017 to 54% in 2018 for Gen Xers. Wonder how much of that is an actual decision to invest more, or just the effect of a very positive stock market year on what are likely smaller portfolios than the two older generations (Boomers and Silent Generation) and a sort of unintentional portfolio slip.According to the pie-chart below, the average asset allocation for respondents with over $3 million in investable assets is 55% stocks, 21% bonds, 15% cash, 6% alternatives, and 4% other.
Granted this is a blog post not an academic article, but I disagree with the bolded statement, however think the author is probably correct with his next statement. Millenials are probably entering peak earning years. Rather than say the stock market has been fantastic, it's important to point out the labor market has not. So many Millenials might just be getting on their feet and getting good jobs right now. But as for me, a millenial, I did have a 401k in 2007 and remember vividly the downturn. Sure it wasn't a balance anyone on here would brag about, but at that time that was the most money I'd ever scrounged together. I suppose that's sort of the problem with the generational markers, many millenials weren't working yet, though there is plenty the generation has in common (bad job market, rapidly increasing tuition/rent, student loans). They still have the largest cash allocation, which shows a generation that still feels burned by the financial markets.After a great 2017, it’s understandable that most generations increased their stock allocation. If you’re a Millennial, you’ve mostly seen good times since 2010. Even though you may have graduated college during the recession, you had no money to invest for the first two years anyway. Now that Millennials are entering stronger earning years and are better educated about the benefits of long-term investing, the trend towards higher stock allocation should continue.
60/40 seems a pretty common ratio once someone hits retirement, so I'm not too surprised at the numbers. Also, AARP says more than half of folks in their 70s have some type of pension. So some type of pension + social security, makes sense to me they would be able to tolerate downturns. It probably has little to do with all they've been through and more to do than many might be trying to grow their nest egg for heirs rather than themselves.For me, the biggest surprise really is how those ages 73+ have a 61% allocation towards stocks. 73+-year-olds have seen it all, yet they are still undeterred. This is very insightful because it seems experience has taught them that staying the course long term is the way to go despite the stock market being at close to record highs today. To them, long-term investing has been proven correct.
Curious what others take on this is, did it surprise you or in line with what you thought?