The 2004 Bank of America Private Bank’s Study of Americans revealed surprising insights about affluent Americans while highlighting a few generational divides. The study showed that wealthy Americans overall feel U.S. stocks offer significant growth opportunities, although investors aged 44 and older trust domestic equities (41%) more than investors under 44. Millennials and Gen Z are more interested in going beyond traditional stock and bond markets to build their wealth and instead prefer to invest in real estate (31%), cryptocurrency and digital assets (28%), and private equity (26%).
“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. “Our study shows that wealthy Americans are focused on diversification, long-term goals, and making a lasting impact with their wealth.”
The study showed that 72% of younger investors feel it isn’t plausible to achieve above-average returns by investing only in traditional stocks and bonds. Only 28% of older investors have the same viewpoint. In the meantime, 47% of 44-year-old and under investors keep their portfolios in traditional investments, which is lower than the 74% allocation of older investors. Meanwhile, Gen Z and Millennial investors allocate 17% of their investment portfolios to alternative investments. Older investors only have 5% of their portfolio designated for alternative investments, but most acknowledge they plan to invest more in alternatives in the coming years.
Regarding cryptocurrencies, almost 49% of younger investors own crypto assets, while 38% more are interested in owning crypto. A good percentage (45%) of Millennials and Gen Z investors own gold, and another 45% want to acquire more gold. Forty-one percent of investors across the board own or are interested in having physical gold as part of their portfolio.
The study also revealed insight regarding generational wealth transfer, particularly where sustaining and sharing family money, wealth planning, communication, and guidance are concerned. For example, 20% of respondents overall said they’ve felt stressed over an inheritance, with interpersonal family dynamics revealed as the top cause of that strain. Lack of clear instructions and documentation was more burdensome to younger wealthy Americans, while their older cohorts were more bothered by an unequal distribution of assets.
The report also revealed that philanthropy, social justice, and climate change are more important to younger investors than to older investors.
Unlock the full study here.
Read More on Trends, Updates, and Industry Leaders
Read more on Loyalty360:
Generational Marketing: How to Target Millennials, Gen Z, and Other Cohorts
Study Reveals Gen Z/Millennials Want Self-Checkout When Buying Groceries
Gen Z, Millennials Embrace Cheaper Alternatives to Luxury Goods