With the market being as shaky as it has been in the past few years, it should come as no surprise that Americans are still afraid to invest. For many Millennials, their first investing experience took place in 2008, which was one of the worst financial times since the Great Depression. This event alone not only caused Millennials to question investing completely, but caused anyone familiar with the market much more cautious whenever placing their hard earned funds on the market. With this being said, here’s a few reasons why Americans are still afraid to invest in the market that has almost made a complete turnaround since The Recession.
1.) Caution Regarding Stocks – After witnessing the dot com bubble and the 2008 crisis, it has caused many people to stray away from investing in stocks. Although the instances were worst case scenarios, they caused enough turmoil to scare investors from jumping on a bandwagon, especially when markets were regarding giants like GM and Lehman Brothers. Clients that were “too big to fail” getting bailouts on Wall Street definitely sent tremors down the spines of many potential investors.
2.) Poor Literacy with Finances – With student debt and poor job leads, investing has been very difficult, simply because the money just isn’t there to invest. Another thing worth mentioning is that Millennials do not trust the market, which explains why they rank so low in the State Street financial tests when compared to Baby Boomers and Generation-X.
3.) Retirement Crisis? – With Millennials less apt to invest, it may result in smaller nest eggs for retirement. With the Social Security looking to slowly disappear by the time Millennials retire, many may find themselves working well past retirement age or with portfolios that are too risky for involvement.
4.) Wary of Professionals – One thing people do not like are middlemen handling their funds, especially if they don’t understand why they’re present to begin with. As many have the idea they can handle investing on their own, they find out it’s more complex and requires a professional. Whether a “Do-It Yourself” attitude or simply the embarrassment of asking for help, many have a hard time swallowing their pride and seeking professional help. Once a person understands how a professional makes money with their investments, the attitude quickly changes from fear to assurance of a proper investment.
5.) Finding Their Niche – Whether entrepreneur or a young worker, many Americans have a hard time finding their calling in the workforce or ability to find the job they went to school for. This conundrum alone makes it hard to invest, as there’s no solid outlook on their future earnings. Even with start-ups popping up everywhere, it’s easy for someone to become overwhelmed by the possibilities they can embark on.
6.) Have Funds, But Don’t Know How to Invest – Some instances are far different from the issues described above. This is especially true in cases when those who have the money to invest and would love to invest don’t have the slightest clue on how to take action. Although many of these individuals turn around to invest, it does take time for them to get their feet wet and begin investing properly.
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