Millennials found their safe space in February's stock rout.
As markets sank into the first 10 per cent correction in two years, millennial investors were hardly frightened and in fact were more enthralled by the drama than their older peers. According to a survey by Bankrate.com, 19 per cent of those aged 18 to 37 reported "feelings of excitement" during the selloff, compared with 8 per cent for Generation X and 4 per cent for Baby Boomers.
"If you're a long-term investor you want to be able to buy low, and millennials had a chance to add to their retirement accounts at a lower price," Bankrate.com analyst Taylor Tepper said by phone. "In that sense, it's very exciting."
Indeed, more than a quarter of millennial investors said they upped their stock holdings during the correction, outpacing the other demographics, according to the survey, which was conducted from Feb. 28 to March 1. It questioned 2,287 adults in the U.S, 1,063 of whom said they have an investment account. Millennials were the least likely group to have an account, with just 30 per cent of those questioned saying that they invest compared with 46 per cent of Gen X and 54 per cent of Baby Boomers, according to the survey.
Another potential reason for the youthful enthusiasm? This was the first "Trump correction," Tepper said, and millennials are disproportionately anti-Trump. In a January Gallup poll, the president had the lowest approval rating among respondents 18 to 29 years old than any other age group. So it isn't surprising that millennials saw the downturn as a rebuke of his administration's policies.
Since bottoming on Feb. 8, the S&P 500 has recouped more than half its losses from the correction. The index was down 0.6 per cent as of 9:59 a.m. Monday, led lower by technology stocks.
Overall, investors kept calm throughout the turmoil, with just 6 per cent of those surveyed pulling cash from their accounts, according to the report. Almost half the respondents said they felt "indifference" to the downturn, compared with 13 per cent who were scared.
"President Trump sort of talks about [stocks] on Twitter all the time, so there's a visibility around stock indexes hitting all-time highs," Tepper said. "When the selloff happened, I was concerned that many people would start selling and change their behavior. But they didn't really seem to do so."