The financial crisis that set off the Great Recession, which began in 2007, is now a decade behind us. But try telling that to millennials.
Before many of today’s 18-34-year-olds started investing, their attitudes and habits about saving money were already being formed by the crisis.
A strong majority of millennials, 82%, said their investment decisions were influenced by the financial crisis and Great Recession, according to a recent survey from Legg Mason Global. Older generations were much less affected, with 13% of Baby Boomers and 14% of 65+-year-olds saying their decisions were affected by the crisis.
“The pain their parents and grandparents experienced left an indelible impression that is only now manifesting itself as they begin to engage with the markets,” Tom Hoops, the executive vice president and head of business development at Legg Mason, said in a statement.
Millennials’ one advantage, their youth, is squandered by investing conservatively. Hoops said their tendency to stay out of risky investments could keep millennials relatively safe if another crisis hits, but lessens the total amount of money they are able to save for retirement.
Not all hope is lost for millennials, though. 78% of millennials say they are looking to add more risk to their portfolios in the coming year, with 66% of millennials saying that would include equities. By comparison, only 27% of Gen-X investors want to take on much more risk, according to the survey.
Those looking to change their investment habits might be doing so because a majority of millennials say they regret their investment habits since the crisis. Their biggest regret was not talking to their financial advisor.
The hardest habit to break might not be about where to put money, but whether to save at all. A majority of millennials said they “live for today,” and 36% said they aren’t thinking about tomorrow.