Millennials prone to herd behaviour when investing
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