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SOURCE Bankrate, Inc.
Aversion to Risk Could Hinder Millennials' Retirement Savings, Other Future Goals
NEW YORK, July 21, 2014 /PRNewswire/ -- The youngest American adults, 18-29 year-olds, are more likely to choose cash as their favorite long-term investment than any other age group, according to a new Bankrate.com (NYSE: RATE) report. Thirty-nine percent say cash is their preferred way to invest money they don't need for at least 10 years. That's three times the number who picked the stock market, despite the fact that the S&P 500 has gained 17% over the past year while most cash investment yields remain below one percent.
"The preference for cash and aversion to the stock market among young adults is very troubling considering this age group has the biggest retirement savings burden. They won't get there without being willing to assume a little short-term price risk in their long-term money," said Greg McBride, CFA, Bankrate.com's chief financial analyst.
Overall, one in four Americans prefer cash investments for money they will not need for at least 10 years. Cash slightly edged out real estate (23%) for the top spot, while stocks came in third with 19% of the vote. Fourteen percent of Americans say they would invest in gold and other precious metals and just five percent say they would choose bonds.
"The stock market records are getting the attention of some investors, as the percentage favoring the stock market increased to 19% from 14% last year," McBride added. "But overall, Americans are still risk-averse when it comes to how they invest their money."
The Bankrate.com Financial Security Index dipped from 101.5 in June to 100.1 in July, but clings to a level that indicates improved financial security compared to one year ago. Any reading above 100 indicates improvement in financial security, while any figure below indicates deterioration. The Financial Security Index has registered above 100 in five of the seven months so far in 2014.
The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here:
PSRAI obtained telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States. Interviews were conducted by landline (500) and cell phone (500, including 282 without a landline phone) in English and Spanish by Princeton Data Source from July 2-6, 2014. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator, and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC, and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe.
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Publicist, Bankrate, Inc.
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