My parents were part of the “Greatest Generation” and had a rather low opinion of my generation of “baby boomers.”  We were a bunch of dirty, long-haired, pot-smoking, commie-hippies who were too self-involved to love our country.  Of course, that was before we got jobs, babies, and mortgages.  Now, we-boomers look down our boomer-noses at the “millennials” or Generation X as being useless techno-addicts, too lazy to work, too afraid to trust, to slow to grow-up, or to take a chance.

In 2014, the White House Council of Economic Advisers released a study about how millennials might be affected by watching their parents during the Great Recession of 2007-9.  The CEA was concerned the millennials would be too risk-adverse and avoid the stock market, much like the Greatest Generation.

However, a new study by Vanguard found that was not true.  The millennials often invest 90% or more of their portfolios into stocks.  The problem is that millennials have a binary view and see the stock market as either very good or very bad.  After all, that’s all they have ever seen.  They are unaware that stocks routinely go up and down modestly, even 20%.  There is always a recession somewhere out there.  When that happens, will millennials over-react and stampede for the door in a panic, making the markets even weaker?

Advisors have an obligation to educate millennials early, that every downtown is not “the big one.”  Millennials need perspective from their advisers!