Millennials like cash more than equities as long-term investments, according to a Bankrate.com study conducted by market research provider GFK Custom Research North America.
Thirty percent of adults between 18 and 37 years old against 21 percent of adults 38 and older preferred to invest money they wanted to put away for 10 years or more into savings accounts and certificates of deposit. But older generations voted more for the stock market at 37 percent while millennials voted at 23 percent.
Overall, 32 percent of adults (18 and older) ranked the stock market as a top choice for long-term investments. Cash investments (24 percent) came in second followed by real estate (22 percent), precious metals (9 percent), bonds (8 percent) and cryptocurrency (2 percent).
Did millennials in the survey like cash because they think it will allow them to take advantage of the Fed’s interest rate increases?
According to the survey, they weren’t. Adults hadn’t even opened savings accounts with online banks that offer higher savings rates; 36 percent responded they were comfortable with their current financial institution, 32 percent like having access to a local branch, 23 percent responded they didn’t have enough saved “to make it worthwhile,” 22 percent were concerned about the security of the online bank, and 19 percent weren’t aware that online bank accounts existed.
“For investment horizons of longer than 10 years, the stock market is an entirely appropriate investment,” said Greg McBride, Bankrate.com’s chief financial analyst. “Cash is not, and especially if you’re not seeking out the most competitive returns.”
Bankrate.com is a personal finance website providing analysis on more than 4,800 institutions and over 300 financial products. GFK Custom Research North America surveyed 1,000 adults aged 18 and up in July.