Mil­len­ni­als prone to herd be­hav­iour when in­vest­ing

Finweek English Edition - - MONEY - BY JUSTINE OLIVIER

Mi l l en­ni­als (t hose born be­tween the early 1980s to the early 2000s) are of­ten con­sid­ered a scep­tica l gen­er­a­tion, and when it comes to f i na nc i a l mat t e r s , p a r t i c u l a r l y in­vest­ments, their view isn’t any dif­fer­ent. It’s not sur­pris­ing why, given that the ma­jor­ity of work­ing mil­len­ni­als started their ca­reers at the be­gin­ning of the 2008/09 mar­ket crash. Ac­cord­ing to a Cap­i­tal One Share­Builder sur vey, re­leased to CNNMoney, this has led to 93% of mil­len­ni­als feel­ing less con­fi­dent about in­vest­ing, pri­mar­ily due to a dis­trust of the mar­kets and lack of in­vest­ment knowl­edge.

As such, this impatient gen­er­a­tion ques­tions ev­ery­thing, and those who al­ready in­vest de­spite their scep­ti­cism of­ten tr y to f ind a way to gain the largest amount of money in the short­est space of t i me – a recipe t hat can only lead to dis­as­trous con­se­quences. Says Matthew Marais, Ful­crum Cap­i­tal found­ing part­ner and CFP: “Mil­len­ni­als of­ten trade in and out of in­vest­ments too reg­u­larly be­cause we think we know some­thing that the mar­ket doesn’t. This leaves us sus­cep­ti­ble to be­havioural bi­ases which of­ten trans­lates to buy­ing high and sell­ing low – not a for­mula for long-term pros­per­ity.

“Mil­len­ni­als are very in­ter­con­nected and net­worked, and as such, are prone to herd be­hav­iour. In in­vest­ing, the

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