researched, not really knowing where that money is headed.” The tragic irony, he tells me, is that low-information investments are hurting his clients’ savings in an era otherwise characterized by an excess of information. Sitting indoors in today’s quarantined climate and tracking volatile stocks from our smartphones doesn’t make us savvy investors... It makes us miserable. “With everyone at home glued to screens, they just keep refreshing the news and watching CNBC and panicking. There’s no sports on. They’re seeing a lot of wealth eliminated. It puts a deep dent in people’s faith in the market.” All this fear and doubt is the scariest variable. “It’s terrifying to think about the next generation after us,” he says. Scott Bishop, of the Houston-based firm STA Wealth Management, has been worrying for a while about millennials’ willingness to bet big on anything that smells innovative. The habits he’s noticed cropping up among older millennials remind him of the late decadent growth phase of the dot-com bubble. They’re micro-investing in high-risk, high-return ventures that only the wealthiest few really have the resources to research. If you and enough of your buddies go in on a private deal, you might feel like high- flying venture capitalists – first to the party for the next Facebook, bro! – but that doesn’t mean you are high-flying venture capitalists. Equity crowdfunding lets you do more or less the same thing. But instead of going in on a private deal to back a possibly promising startup your buddy from college hyped up over the group chat, you’re co-investing with strangers on the Internet. What could go wrong ?
at the prospect when they actually do. “It’s kind of like being kicked in the gut three times and asking them for three more. It’s not such an easy thing to do,” says Roth. It’s an era of learning opportunities in that regard – or an era of abdominal strength-training, to overstretch a metaphor. Besides conditioning yourself to take the hits and wait it out, nervous millennial investors might do well to avoid peering into their accounts at all for a while: “If somebody can just not look at their statements for a long period of time, they’d be better off,” says Roth, who admittedly advises fairly few millennials – affluent or otherwise. Brandon Hayes’ clients at the millennial- focused firm oXYGen Financial, on the other hand, are all about his age (37) or younger. Hayes started college amid the tech bubble’s burst in 2001 and was just launching his career when the recession hit. His clients’ standard approach to investing often ranges from stereotypically wary to nonexistent, Hayes tells me. The most common refrain he hears – “’Oh, that’s like gambling, isn’t it?’” – betrays what he calls, almost euphemistically, “a lack of trust.” Out there in the field, clients with wounded 401(k)s want to liberate their money – leaving Hayes the unlucky job of instructing them to sit back and watch their savings suffer instead. He talks about millennials and the stock market the way some men talk about war... “Clients who give in to second-guessing their investments go buy rental properties or invest in a business with a relative instead,” and Hayes hates to see it. “They take on unnecessary risk, not having fully
American Consequences
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