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Millennial and Gen Z investors are taking a more diversified approach to building their wealth than the generations that came before them, moving away from traditional stock and bond portfolios in favor of assets such as real estate, private equity, crypto/digital investments and gold, a study from Bank of America’s Private Bank shows.
The survey of high-net-worth individuals found 41% of investors age 44 and older believe stocks still provide the best way to grow wealth. But among younger investors just 14% believe stocks are the way to go; 31% believe investment real estate is the No. 1 path to growing their portfolios, followed by digital asset at 28% and private equity at 26%.
Older investors share the younger generation’s appreciation of real estate, with 32% saying it is a good way to build wealth. But they also prefer emerging market (25%) and international (18%) equities, with digital assets the least favorite choice at 4%
“We’re living through a period of great social, economic and technological change alongside the greatest generational transfer of wealth in history,” said Katy Knox, president of Bank of America Private Bank, in a release announcing the results. “Our study shows that wealthy Americans are focused on diversification, long-term goals and making a lasting impact with their wealth.”
Seventy-two percent of younger investors (ages 21-43) believe it is no longer possible to achieve above average investment returns by investing solely in traditional stocks and bonds, compared to only 28% of investors over the age of 44 that hold the same view.
The study found that among younger high-net-worth investors:
47% of their portfolios are in stocks and bonds, far lower than investors over the age of 44 (74%).
17% of their investment portfolios are allocated to alternatives, compared to 5% allocated by older investors. Most (93%) say they plan to allocate more to alternatives in the next few years.
Nearly half (49%) own cryptocurrencies and another 38% are interested in owning it. They rank cryptocurrency among the top opportunity areas for growth, second only to real estate investments.
45% own physical gold as an asset and another 45% are interested in owning it. Overall, 41% of the wealthy own (18%) or are interested in buying (23%) physical gold.
In addition to influencing the next generation, the “Great Wealth Transfer” will also contribute to women controlling more wealth than ever before, according to Bank of America Institute. Over the next decade, $30 trillion in U.S. wealth is expected to be transferred to women influencing financial decision-making, philanthropic giving and more.
Read more: $30 trillion in wealth will transfer to younger women
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This article was originally published by a www.equities.com . Read the Original article here. .