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Millennials and Baby Boomers – What their Stock Portfolio Reveals

Carl Cotton, TechandHumanity.com
0 Comments| August 26, 2019

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Although millennials are now of age, their influence on the stock market is still in its infancy. The question is, can they produce better results than the older generation, known as baby boomers, who are soon to retire?

To get the answer to this question, two stock portfolios were created by The Wall Street Journal. The first portfolio was supposed to benefit from the increased spending power of the new millennials. This covered people who were born between 1981 to 1996.

We must make sure we don’t confuse Generation Z with millennials. Millennials are now grown up and have completed their education. In fact, in just two years, the eldest millennial will be turning 40. A study carried out by PayScale found that at this age, female earnings are at their highest, while male earnings peak when they are in their early 50’s.

The second portfolio was centered around the habits of baby boomers. This group is made up of those born between 1946 to 1964 who are soon to retire. It is known that in the USA, boomers play a major role in the political and economic arena.

It was revealed that the portfolio of millennials showed very different results when compared to the portfolio of boomers, with the latest showing that the generational gap does exist. Millennials showed both skepticism and interest in Beyond Meat Inc, a company which offers products which are vegetarian but similar to meat.

It also revealed that though many chains have embraced this type of food, people are actually not willing to pay more for a product if it doesn’t taste good. This might explain why Beyond Meat is the costliest US stock to short sell. Now, whilst opinions on the taste of these products is rather subjective, one thing for certain revealed by the study is that the younger generation, particularly those who are more affluent, will not hesitate to pay extra for something which they consider environmentally friendly and ethical.

Furthermore, it was noticed that the portfolio of baby boomers showed an inclination towards healthcare and pharmaceutical; human frailty and life longevity are predominant factors, with health insurance (or international health insurance if an individual is an expat or lives abroad for a long period of time) being an important consideration for older members of the population. According to the Census Bureau, by the year 2035, the number of Americans above the age of 35 will be much greater.

Entertainment is also a source of division. Youngsters are inclined towards popular streaming companies like Netflix while other TV networks, such as CBS, are preferred by people over the age of 60.

Millennials are also known todelay purchasing their first home, especially in the aftermath of the global financial crisis. However, they are entering prime property purchasing years which is surely beneficial for property developers like Lennar. On the other hand, if we consider the boomers who already own properties, companies like Home Depot stand to benefit as there is increased spending on renovation and repairs.

The portfolio also reflects what the two generations preferred in terms of leisure. Thor Industries and Royal Caribbean are usually popular amongst the boomers, whilst companies which manufacture exercise equipment are popular with millennials.

Tech stocks are more predominantly a part of the millennial portfolio, though not exclusively, with companies such as Facebook being popular among both. It was revealed that 50% of people above the age of 65 use Facebook.

Boomer brands and also their habits have generally stood the test of time something the younger, more fickle generation has not yet had a chance to do. Some habits might be ubiquitous tomorrow, but many others will simply disappear.


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