{"id":1618,"date":"2016-07-01T12:59:20","date_gmt":"2016-07-01T12:59:20","guid":{"rendered":"http:\/\/www.newsfin.co.uk\/news\/?p=1605"},"modified":"2016-07-01T12:59:20","modified_gmt":"2016-07-01T12:59:20","slug":"are-millennial-investors-facing-a-perfect-strom","status":"publish","type":"post","link":"https:\/\/www.vizionwealth.co.uk\/news\/are-millennial-investors-facing-a-perfect-strom\/","title":{"rendered":"Are millennial investors facing a perfect strom?"},"content":{"rendered":"<h3>Looking at the mismatches between expectation and reality<\/h3>\n<p>Depressed wages, escalating living costs and a struggling global economy \u2013 millennials have a lot on their plates. They need investment income to support short and long-term financial aspirations. Does something have to give and is the perfect investment storm brewing?<!--more--><\/p>\n<p>Depressed wages, escalating living costs and a struggling global economy \u2013 millennials have a lot on their plates. They need investment income to support short and long-term financial aspirations. Does something have to give and is the perfect investment storm brewing?<\/p>\n<p>The Schroders Global Investor Study 2016 found that millennial investors (those aged 18-35) have unrealistically high income expectations, a worryingly short-term investment outlook, and many dependencies to support both now and in the future.The result could see millennials fall drastically short of their investment goals.<\/p>\n<p><strong>Schroders Global Investor Study revealed:<\/strong><\/p>\n<ul>\n<li>Millennials demand more income (10.2%) than other investors (8.4%)<\/li>\n<li>Millennials have an extremely short-term investment outlook, with 63% holding investments for less than 2 years<\/li>\n<li>Millennials are risk averse, prioritising capital preservation and a return higher than inflation when choosing an investment<\/li>\n<li>Millennials\u2019 income is being stretched across a wide spectrum of dependencies from supplementing salary and pension to supporting children and buying houses<\/li>\n<\/ul>\n<h2>Is a financial storm brewing?<\/h2>\n<p>It is a potentially toxic mix. We live in a world where most developed nations\u2019 interest rates are at or below 0.5%, and, in some cases, heading lower. The average stockmarket yield is just 3.8%[1].<\/p>\n<p>To get the higher income they demand millennials would either need to take more risk or hold investments for a longer period in order to ride out market cycles, neither of which they seem willing to do.<\/p>\n<p><strong>The major risk is that millennials are labouring under two misapprehensions:<\/strong><\/p>\n<ul>\n<li>Their investments will grow faster than is realistic<\/li>\n<li>The pot they ultimately do build will pay a far higher income than is likely<\/li>\n<\/ul>\n<p>Compounded over a 20 or 30-year time frame, the gap is potentially huge, making the mismatches between expectation and reality identified by the Schroders Global Investor Study 2016 a cause for real concern.<\/p>\n<h2>Stretching incomes to the limit<\/h2>\n<p>To make matters worse, millennials have a far greater number of dependencies than older generations over which their income is being stretched.<\/p>\n<p><strong>Schroders Global Investor Study found the main reasons millennials invested were:<\/strong><br \/>\n1. To supplement salary (46%)<br \/>\n2. To grow a portfolio (41%)<br \/>\n3. To supplement pension (35%)<br \/>\n4. To provide income for children\/relatives (30%)<br \/>\n5. To buy something other than a home (28%)<br \/>\n6. To pay for a deposit for a home (26%)<br \/>\n7. To pay education fees (26%)<br \/>\n8. To pay for healthcare (22%)<\/p>\n<p>Yet, according to a recent Guardian newspaper study, \u2018a combination of debt, joblessness, globalisation, demographics and rising house prices is depressing (millennials) incomes.\u2019[2]<\/p>\n<p>The chasm that has opened up between millennials\u2019 investment goals, their unrealistic income expectations and short-termism needs to be addressed, otherwise we could be heading for another social and economic crisis. \u03c4<\/p>\n<p><strong>Source: <\/strong><br \/>\n<em>[1] Source: FTSE, S&amp;P 500, CAC, DAX, Shanghai, Nikkei, ASX, Hang Seng, Bovespa, Mexbol. Average forward 12-month yield across 11 indexes as at 18 May, 2016, according to Bloomberg data.<br \/>\n[2] http:\/\/www.theguardian.com\/world\/2016\/mar\/07\/revealed-30-year-economic-betrayal-dragging-down-generation-y-income<\/em><\/p>\n<p>INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.<\/p>\n<p>THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.<\/p>\n<p>PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Looking at the mismatches between expectation and reality Depressed wages, escalating living costs and a struggling global economy \u2013 millennials have a lot on their plates. They need investment income to support short and long-term financial aspirations. Does something have to give and is the perfect investment storm brewing?<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1618"}],"collection":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=1618"}],"version-history":[{"count":0,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1618\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=1618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=1618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=1618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}