A Bankrate survey found 40% of people aged 18-29 prefer to invest in cash money they won’t need for at least ten years.

This might be a good strategy in the near- to long-term future, with looming rising interest rates and a strengthening dollar possibly causing significant sell-offs of equities. But as it stands now and in the past several years, holding cash has been a bad, bad decision.

Cash-hoarding millennials missing out on record-breaking stock market gains

By 2018, millennials will control $9 trillion in assets, according to a study by Deloitte. What they stand to inherit will grow by 4 times that amount, or $36 trillion, by 2061, according to Boston College’s Center on Wealth and Philanthropy. But don’t expect this group to put that money to work in the markets, according to a new survey by Bankrate.com.

Instead, these young earners are keeping their money on the sidelines, choosing to save rather than invest their hard earned cash in stocks. Millennials, in fact, have the most conservative investment approach of any age group surveyed by Bankrate and that could be to their own detriment, given the market’s run up.

Bankrate.com released the results of a new survey about how secure Americans feel about their personal finances compared with 12 months ago. According to the results, Americans overall chose cash as their favorite long-term investment. In fact, 1 in 4 Americans prefer cash investments for money they will not need for at least 10 years. Stocks came in third with 19% of the vote.

Nearly 40% of 18-29 year-olds say cash is their preferred way to invest money they don’t need for at least 10 years — despite the fact that the S&P 500 has gained 17% over the past year while the yield on cash investments is below 1%. Many Millennials are missing out on this market’s profits.


 
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