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Millennial Investing, a Primer

Investing Risk Puzzle Pieces

Authored by Garrette Furo

The millennial generation is waking up and finding itself at the receiving end of the largest wealth transfer in modern times: over 30 trillion dollars from the baby-boomers. The avocado market simply cannot bear this influx of cash and the trillion-dollar question becomes – where will these funds go? This question is leaving wealth managers, economists and the legacy financial community at large scratching their heads – wondering how they can participate.

Demographers typically define millennials as those born in between the early eighties and mid-nineties – too young to be crippled by the financial crisis but old enough to be conditioned by it. In fact, the oldest members of the generation were likely only in the workforce for one to three  years before the financial blast hit and ignited the recession of 2008. In some cases, this timing may have been fortunate.  What one may call “elder-millennials” found themselves as cheap labor, particularly hirable, in a rare technological emerging market environment.

Many of the younger to median aged millennials, including your author, were in their mid-teens at the time however. And if you happened to grow up in Florida, Texas, California, or other areas where a majority of the nefariously underwritten mortgages originated , you may very well remember the hollowed-out shopping malls and half-finished housing developments. Many of the boomers were financially ruined – the rhetoric at homes was that the economy was destroyed. Retirements and college savings accounts were vanquished by the distorted statistics of contemporary finance. Less obvious coincidences live here.

Growing up in a financial crisis creates a distrust in financial institutions that will ripple through the next century. Occupy Wall Street is the most obvious symbolic representation of client, yes client, attitude towards financial institutions. While the author fully admits that sitting in Zuccotti park does nothing to transform the financial landscape, wealth bearing millennials and workers are now earning or inheriting the only tool that can transform the financial landscape. The question of where the money will go should be second to the impetus of investing and the virtues of the client. It is not just about returns for most in the generation: it’s transparency, trust, and the security that their investments are not just endowing agents that hurt them in their youth.

The institutional distrust of the generation has a close cousin called climate change and a brother called the internet. The generational response to this family is empowering distributed computing systems like Bitcoin and Ethereum, logical wealth management and savings applications, and socially responsible investing that is sensitive to moral alignment. Understanding the true ethos of the generation is the only way to understand where the trillions flow. The creation of a new type of financial institution may be the most rational way to attempt to acquire it.

THE INFORMATION CONTAINED HEREIN REPRESENTS THE AUTHOR’S SUBJECTIVE BELIEF AND IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. NEITHER THE AUTHOR NOR ANY OF HIS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED HEREIN. THIS INFORMATION IS BASED ON DATA FOUND IN INDEPENDENT INDUSTRY PUBLICATIONS. ALTHOUGH WE BELIEVE THE DATA TO BE RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS ARTICLE. MANY OF THE STATEMENTS CONTAINED HEREIN REFLECT OUR SUBJECTIVE BELIEF.