Millennials Are Sitting Out the Bull Stock Market

What has happened to the generation of investors that came of age in the middle of the worst financial crisis since the Great Depression? The evidence suggests their experiences scarred them deeply, though we don’t yet know if this psychological damage is permanent.

That is the conclusion of a white paper by Vanguard Group, entitled “Risk-Taking Across Generations.” You may have missed it when it was first published in June (I did), but it is worth considering in light of its huge data set. The low-cost investing giant analyzed 4 million Vanguard retail investor households, and although many of the findings were pretty run-of-the-mill,1 some details were shocking. The most stunning conclusion: Young adults who started investing with Vanguard after the financial crisis are more than twice as likely to hold no stock as those who began investing before the crisis struck. Indeed, almost a fifth of millennial investors had no money in equities, and thus are missing an opportunity to take advantage of the multiyear bull stock-market run.