While the mainstream media would like you to believe that the world is in utter chaos with Trump at the helm of the free world, there is plenty of good news to talk about, particularly when it comes to the economy.
The Dow Jones industrial average crossed the 22,000 milestone this past week. Trading ended on Friday with the Dow Jones Industrial Average closing at a record high of 22,092.81. Friday marked the eighth business day in a row that the Dow closed at a record high as well as the thirty-fourth time this year that the Dow broke a record at the closing bell.
Many believe the stock market’s strong performance can be attributed to optimism in regards to the Trump administration’s promise to overhaul the tax code and create a more business-friendly environment. According to the Department of Commerce, the economy boasted a 2.6 percent growth rate in the second quarter of 2017. It looks like the 3 percent growth rate promised by President Trump might not be a fantasy after all.
Many millennials are looking at the financial environment as the perfect time to get involved in the stock market. According to E-Trade’s most recent quarterly investment survey, 31 percent of investors between the ages of 25 and 34 are planning on moving money out of cash and into the stock market. Since millennials have now surpassed the baby boomers as the largest generation in America, this is quite a development.
Oddly enough, a much lower proportion of older investors said they planned on doing the same. Only 19 percent of those between the ages of 35 and 54, and 9 percent of investors 55 and older said that they planned to “move out of cash and into new positions.”
A Fidelity investments report says that millennials are outpacing their older counterparts in opening trading accounts as well; millennials now make up 40 percent of new accounts owners.
Millennials have previously exercised extreme caution when it comes to investing in the stock market, primarily because they came of age during the financial crisis that saw US homeowners lose trillions of dollars in equity. However, 78 percent of millennials plan to take on more risk this year, according to a survey from Legg Mason.
It is certainly a good sign that millennials finally have enough confidence to participate in the stock market. A recent investment risk analysis by Nerd Wallet finds that a hypothetical savings contribution of $563,436 has a 95 percent chance of tripling in value if it is invested in the stock market. That same analysis concluded that millennials could miss out on $3.3 million by playing it safe and not investing.
If millennials are paying attention to these trends, it looks like they do not want to miss out on the many opportunities available to them by investing in the stock market.
More millennials will probably continue to invest in the stock market as they graduate from college and settle into full-time jobs. Nearly a decade after the financial crisis, millennials finally feel confident that the stock market is a worthy investment. Hopefully, the economy will continue to grow in leaps and bounds, setting up new millennial investors for financially secure retirements.