Watching the Great Recession of 2008 to 2009 from the sidelines has turned many young adults into conservative investors, says Legg Mason.

Nearly a decade after the financial crisis and recession, an overwhelming majority (82 percent) of millennials say the investment decisions they are making now were influenced by the recession. Fifty-seven percent say their investing was strongly influenced by it.

In comparison, only 39 percent of Gen Xers, 13 percent of baby boomers and 14 percent of those over age 65 say the recession held sway over their investing.

Legg Mason, a global asset manager with $731 billion in assets, surveyed 900 people, including 305 millennials, for its annual Global Investment Survey released Thursday. Millennials are those people born between 1982 and 2004, many of whom were only children during the Great Recession.

Eighty-five percent of millennials say they are conservative investors and 52 percent consider themselves very conservative. This compares with 30 percent of Gen X, 29 percent of baby boomers and 28 percent of those over 65 who consider themselves very conservative investors.

“The pain the parents and grandparents of millennials experienced left an indelible impression that is only now manifesting itself as they begin to engage with the markets,” said Tom Hoops, Legg Mason’s executive vice president and head of business development, in a statement. “They are not emulating previous generations in their investment behavior.”

If the conservative philosophy “keeps millennials away from stocks and bonds entirely, it could have perilous implications for their ability to save and benefit from market growth for retirement,” he added.

Instead of being so conservative that it drives them away from taking any risk, millennials and other investors should take a risk-managed approach to equities, he said.

“To achieve their financial goals, young investors must become more outcome-oriented in their choices. They should consider going outside their home markets, finding proven long-term managers and consider putting part of their equity allocations in low-volatility strategies,” Hoops advised. “They also should consider multi-asset products, and alternative products such as real estate and infrastructure.”

A Gallup survey indicates investors from all age groups are still being influenced by the Great Recession.

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