The latest “2024 US Bank Study on US Wealthy Individuals” published by Bank of America reveals significant differences in wealth management perspectives among different generations, particularly in investment preferences. The report points out that young wealthy individuals aged 21 to 43 prefer non-traditional investments such as cryptocurrency and private equity, with 93% of young millionaires planning to increase their allocation to alternative investments.
Bank of America, the second-largest commercial bank in the United States, recently released a report titled “2024 US Bank Study on US Wealthy Individuals,” which reveals different perspectives on wealth management among different generations and suggests that these differing views may drive new models and trends in financial decision-making as wealth shifts to the younger generation. The study surveyed 1,007 US individuals aged 21 and above with investable assets exceeding $3 million.
The report indicates that there are diverging views between older wealthy individuals (44 years and above) and younger wealthy individuals (21 to 43 years) regarding economic prospects and growth opportunities. Young wealthy individuals are twice as optimistic about the US economic conditions compared to older wealthy individuals and have a greater divergence in their views on the global economic outlook.
However, they share a similar rating in terms of personal financial security and hold an optimistic outlook for the stock market in the coming year.
The percentages in the image represent the proportion of people who voted “excellent” or “very good.”
Regarding investment opportunities in the current environment, young and older wealthy individuals also have different views. According to the survey, 72% of young wealthy individuals believe that investing solely in traditional stocks and bonds will not yield above-average returns, compared to only 28% among older wealthy individuals. This difference in perspectives influences their investment preferences.
Young wealthy individuals are more inclined towards non-traditional investment options, particularly emphasizing real estate, cryptocurrency, and private equity. In contrast, older wealthy individuals prefer traditional investment choices, especially domestic stocks, real estate, and emerging market stocks. It is worth noting that real estate is the only investment category that receives unanimous favorability from investors across all age groups.
Despite a decline in interest in cryptocurrency since 2022, it remains an important component of young investors’ portfolios. The report shows that 93% of young investors plan to increase their allocation to alternative investments, including cryptocurrency, in the coming years.
The report also reveals a new trend in portfolio asset allocation, with young investors seemingly completely departing from traditional asset allocation models. For the wealthy group aged 21 to 43, regardless of whether they consider themselves conservative or aggressive investors, their portfolio allocations are generally similar, with various assets such as alternative investments, cryptocurrency, stocks, bonds, and cash being “evenly distributed.” In fact, the group that identifies as the most conservative investors has the highest proportion of investment in cryptocurrency.
On the other hand, older investors demonstrate portfolios that align with traditional allocation models. Aggressive investors hold more stocks and alternatives, while conservative investors hold more cash and bonds and fewer stocks. The proportion of cryptocurrency in their portfolios is all less than 2%.
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