Why Gen Z bets big while boomers play it safe: A generational breakdown of market returns

Published On Oct 3, 2024, 12:31 PM

The recent analysis by JPMorgan Asset Management highlights the differing investment approaches and outcomes among generations in the stock market. Baby boomers, Gen X, millennials, and Gen Z exhibit varied behaviors shaped by the unique economic environments they encountered during their formative investing years. Boomers have seen average annual returns of 10.2% and generally adopt a cautious, diversified strategy due to their experiences with market volatility. Gen X's returns are slightly better at 11.6%, showing a mixture of caution and optimism. Millennials, starting to invest during the dot-com bust, have only achieved around 8.0% returns, leading many to prefer high-risk investments like cryptocurrencies. Additionally, Gen Z, experiencing an average stock market return of 14.1%, primarily invest in high-risk assets and are yet to face a true bear market, which may make them vulnerable during economic downturns. The analysis underscores the importance of diversification and warns against over-investment in cash at high yield rates. Overall, each generation's investment style reflects their unique economic experiences and market conditions during their entry into investing.