In a survey conducted by bankrate.com, just 26% of people under 30 are investing in stocks. This is compared with 58% of people between the ages of 50 and 64. That is not a good fact, as the beginning of one’s career is the best time to start investing. Any money you invest has to have enough time to grow.
Moreover, the simple fact that Baby Boomers are older may explain some of the difference in behavior. The fact is that it is hard to prioritize investing and saving for retirement, when it appears that you will be working forever. The young person has the feeling of invincibility, which is the natural phenomenon of young people that keeps them away from the stock market.
Furthermore, a lack of money and information are the major reason why those under 30 do not invest in the stock market. According to the aforementioned survey, 18 to 30 year olds were the most likely to not know enough about the stock market when they were asked to invest. The conclusion is that 38% of survey respondents under 30 gave this reason for staying away from stocks. This shows the issue of the financial education in the US. The person who is entering into a career must not have practical knowledge to invest. The major point remains that lack of funding is the main thing, which is hampering young people willingness to invest.
One of the main reasons why young people are not investing in the stock market is because they do not have enough money to invest. Young people in this age group have been affected by unemployment and underemployment in the wake of a recession. This includes a staggering level of student debt increases, which makes it harder for the younger generation to make a steady income and at the same time have enough money to save money for investment purposes.
Also, for young people, it is very hard to save an extra $100 of their income. The recession has affected the young people as they have seen many turbulences in the stock market and they are wary of this phenomenon.
Besides, what appears to be a bullish argument for the stock market turns out to be a compelling case and this is why the market gets into trouble at times. It is a fact that it would indeed be bullish if there were many sideline cash. As the saying goes, bulls markets do not end a market phenomenon until the last bear appears.
Also, we have to admit that it certainly seems, as though we are nowhere close to, the last bear turn bullish. According to a weekly survey of Investor’s Intelligence, 50% of financial writers are bullish on the market compared to 60% in late February.
Therefore, can we conclude that now is the time to dump stocks? The answer is not necessarily, as, in fact, many potential investors look at these sentiment surveys as contrarian indicators. Another way to look at this is that a decline in bullish investors could be a good thing for stocks. In fact, the best time to buy stocks on the exchange is when investor fear will drive the prices lower.
The conclusion is that if everybody is bullish, then some investors must be worried as a result. The investor intelligence bullish sentiment indicator is currently at the lowest level since late January. That is the point when stocks bottomed out after an early year tumble.
