The youngest American adults are more likely to choose cash as their favourite long-term investment than any other age group, according to a Bankrate.com report.
Thirty-nine percent say cash is their preferred way to invest money they don’t need for at least 10 years. That’s three times the number who picked the stock market, despite the fact that the S&P 500 has gained 17% over the past year while most cash investment yields remain below 1%.
“The preference for cash and aversion to the stock market among young adults is very troubling, considering this age group has the biggest retirement savings burden,” says Greg McBride, Bankrate.com’s chief financial analyst. “They won’t get there without being willing to assume a little short-term price risk in their long-term money.”
Overall, one in four Americans prefers cash investments for money they will not need for at least 10 years. Cash slightly edged out real estate (23%) for the top spot, while stocks came in third with 19% of the vote. Fourteen percent say they would invest in gold and other precious metals, and just 5% would choose bonds.
“The stock market records are getting the attention of some investors, as the percentage favouring the stock market increased to 19% from 14% last year,” he adds. “But, overall, Americans are still risk-averse when it comes to how they invest their money.”
Related articles: