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Investment strategies across generations

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Scottish FriendlyApril 9, 2024

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The Influence of Age on Financial Opportunities

The author of this blog is guest freelance writer Lily Meyers

The concept of trying to build a secure financial future through investment isn’t uncommon, but the strategies people have used over time have varied. This is due to the considerable influences of age and generational backgrounds. 

This piece will dissect the ways in which investment perspectives have shifted per generation to determine whether age truly dictates opportunities. 

The Silent Generation (Born 1928-1945)

This post-World War II generation is seen to have taken a much more conservative approach to investing, as they experienced severe economic hardships e.g., the Great Depression. Their investment portfolio often leans towards savings accounts, bonds, and other low-risk assets, prioritising capital preservation over aggressive growth.

Some individuals in this generational sector have managed to adapt to more modern techniques of investing, however, this may be down to input from a younger generation. 

Baby Boomers (Born 1946-1964)

Born in an era of substantial societal and technological transformations, Baby Boomers possess a wide array of investment viewpoints. Many experienced surges in both the stock market and property sectors, shaping their investment strategies significantly. As a result, their portfolios often strike a balance between traditional and growth-centric investments.

Key investments favoured by ‘Baby Boomers’ include property, pensions and dividend-yielding stocks. These assets are particularly popular as Boomers approach their golden years and contemplate retirement. 

Generation X (Born 1965-1980)

Growing up amidst economic instability and the collapse of the dot-com bubble, Generation X showcases a practical and flexible approach when it comes to their investment decisions. Their main focus is on spreading their investments across different avenues and being receptive to investigating different types of assets.

Investors from Generation X frequently seek advice from financial experts, prefer retirement accounts and emphasise the importance of investing in their own knowledge and abilities. They fully grasp the enduring effects on their financial security and prioritise learning in order to protect their retirement.

Millennials (Born: 1981-1996)

The Millennial generation, having come of age during the digital revolution, brings a unique approach to investing. Their comfort with technology has led them to embrace digital platforms and applications for managing their investments.

The shadow of the 2008 financial crisis looms large in their financial decision-making process. This pivotal event has shaped their investment strategies, leading many to eschew traditional avenues. Instead, they favour socially responsible investments and alternative opportunities that align with their values.

Generation Z (Born 1997-2012)

The earliest members of Generation Z are just beginning to explore the realm of investment. They've been immersed in technology throughout their lives, witnessing its rapid evolution, which will likely shape their approach with a blend of digital proficiency and innovation.

The strategies of Gen Z are still being understood, but it's anticipated that they'll gravitate towards sustainable and technology-centric investments. They're expected to seek educational resources and virtual communities to guide them in making informed decisions.

To summarise  

Certainly, our age influences our perspective on investing. The experiences of each generation, the economic conditions they've encountered, and the technology they're accustomed to all contribute to their financial outlook. From the prudent approach of the Silent Generation to the technologically adept and impact-oriented mindset of Gen Z, each group has its unique viewpoint. Regardless of your age, there are always opportunities for investment. With that being said, it’s recognising these generational disparities that can assist you in aligning your investment decisions with your objectives and background.

Remember, stock market investments can go down as well as up and you could get back less than you've paid in.

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