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Rich young Americans have lost faith in the stock market — and are betting these three assets instead for long-term tailwinds

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Rich young Americans have lost faith in the stock market — and are betting these three assets instead for long-term tailwinds

The stock market has always been the preferred choice for people looking to invest their money. But that may be about to change as the younger generation enters the scene.

According to a recent Bank of America survey, individuals between the ages of 21 and 42 with assets of at least $3 million own only 25% of their portfolio invested in stocks. For wealthy investors over the age of 43, the share allocation is much higher at 55%.

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This year’s bear market may have something to do with millennials’ decisions.

We have seen very strong performance in the stock market over the past decade and we are living through volatile times. “It’s at the forefront of people’s minds,” Jeff Bosconi, chief operating officer of Bank of America Private Bank, says in an interview.

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Despite the stock market’s recent rebound, the benchmark S&P 500 is still down nearly 18% year-to-date.

Bosconi adds that the younger generation of investors increasingly believes that “a traditional portfolio of stocks and bonds will not generate above-average returns over time.”

So what assets do rich millennials prefer?

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Cryptocurrency

Once considered a niche asset, cryptocurrency has now entered the mainstream. A study conducted by the CFA Institute earlier this year showed that 94% of state and government pension plans have invested in cryptocurrency.

Of course, many investors learned about the volatility of cryptocurrencies the hard way with this year’s massive pullback. But some wealthy millennials still believe in the asset class.

In a Bank of America survey, 29% of young people said crypto offers great opportunities for growth, while only 7% of the older group agreed.

Unsurprisingly, younger people also have much greater exposure to cryptocurrency (average setting aside 15% of their portfolio) than the older generation (average setting aside 2% of their portfolio).

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It’s easy to get involved – there are a lot of platforms that allow you to invest in cryptocurrency. Just be aware of the fees: many exchanges charge up to 4% commission fees just for buying and selling cryptocurrencies, but some investment apps charge 0%.

Read more: 10 Best Investing Apps for ‘Once in a Generation’ Opportunities (Even If You’re a Newbie)

Real estate

Real estate has become a popular asset class recently – perhaps because it’s a well-known hedge against inflation.

As the price of raw materials and labor rises, it becomes more expensive to build new properties. This raises the price of existing properties.

Well-chosen properties can provide more than just a price estimate. Investors also get a steady stream of rental income.

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It is not surprising that high net worth individuals – regardless of their age – see opportunity in these assets.

In a Bank of America survey, 28% of young adults said that real estate offers great growth potential. And 31% of the elderly have the same opinion.

But you don’t need to be an owner to start investing in real estate. There are plenty of real estate investment trusts (REITs) as well Crowdfunding platforms It can get you started on becoming a real estate mogul.

private property

Private equity refers to investments in companies that are not publicly traded on a stock exchange.

A private equity fund takes money from the fund’s investors, invests the money in companies – usually by controlling stakes – and works with companies’ management teams to make their businesses more valuable. The goal is to sell their portfolio companies later – in the hope of making a decent profit.

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While private equity funds are not generally open to small investors, they have gained popularity among the wealthy.

In 2021, private equity purchases have doubled from 2020 to $1.1 trillion, according to Bain & Company.

It has also garnered the attention of the high-net-worth millennials.

The Bank of America survey indicated that 25% of individuals ages 21-42 with assets of at least $3 million identified private equity as one of their greatest growth opportunities, compared to 15% for those who are older.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.