Younger investors prefer low volatility to high returns

A new survey found that more than half of young investors would rather experience less volatility – even if it meant passing up the chance for higher returns

More than half of millennial investors between 18 and 30 favor a conservative investment approach, according to a survey by Sun Life Global Investments.

The survey found that 51% of investors between 18 and 30 would rather experience less volatility – even if it means passing up a chance at a higher rate of return. The survey found that 44% of millennials classified themselves as either somewhat or highly risk averse, and 44% described their investment approach as conservative. Meanwhile, 33% said they had sold investments to raise cash, with half of that number saying the sale was triggered by the fear of losing money.

“Investors are feeling the negative effects of recent market turbulence, but none as much as the millennials, which is surprising,” said Sadiq S. Adatia, chief investment officer for Sun Life. “They could potentially be putting their retirement savings in jeopardy by investing so conservatively. These are investors with a long time horizon who should consider taking on more risk for the potential to earn higher returns – there are solutions that can help.”

The survey found that 48% of millennials – more than any other age group – said that recent market volatility has led them to have more frequent conversations with financial advisors.

“It’s encouraging to hear that as millennials were anxious about the markets they turned to their financial advisors for guidance,” said Cindy Crean, managing director, private client, Sun Life. “It’s important they don’t let emotions guide their investing decisions.”

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