This article, written by Aine Givens, data reporting provided by Dom DiFurio and story editing provided by Jeff Inglis for Stacker Media, explains how different generations approach investing, which you may find of interest. Sponsored by TD.

How investing styles differ across generations


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Written by Aine Givens, journalist and contributing writer for Stacker Media. Data reporting provided by Dom DiFurio for Stacker Media. Story editing provided by Jeff Inglis for Stacker Media. 

For a quick illustration of how investing strategies vary across generations, consider this 2022 Statista survey sourced in this on World Economic Forum article, which asked how you would invest $100,000. Nearly half of baby boomers and the older Silent Generation would put the money in stocks. That compares to 53% of Generation X, 63% of millennials, and 81% of Generation Z. Age, of course, drives some of that divide—and a tolerance for risk.

Or you could look at how enthusiastically they embrace digital tools. A 2019 Pew Research study found that millennials, born between 1981 and 1996, make use of computer-generated recommendations to invest their money and turn to gamification to learn more about markets. The younger Generation Z, born between 1997 and 2012, is more likely to bank with apps and likes cryptocurrency as an investment, says an April 2021 Motley Fool survey.

Education is another distinguishing factor when it comes to how people invest in their future. Compared with their predecessors, millennials are the most educated generation—more than 70% of Canadians between ages 30-34 have a secondary degree, according to Statistics Canada. However, almost one quarter of those 30-34 year olds also carried a median student loan debt of $12,000, which may impact if—and how much— money is available for investment after they make student loan repayments.

Environmental concerns are more often a key consideration for younger investors. In 2018, the Responsible Investment Association found that, compared to baby boomers, Canadian millennials are nearly twice as likely to say that a company with good environmental, social, and governance, or ESG, are good investments. Among high-net-worth American millennials, about 7 in 8 (87%) consider a company's ESG track record an important consideration in investing, according to a 2020 study by Morgan Stanley Capital International.

Baby boomers, those born between 1946 and 1964, are either retired or getting close to retirement and are less likely to take chances with the nest eggs they've built. Generation X, born between 1965 and 1980, often are in their prime earning years and may be more likely to take on a higher level of risk in their investments, with the objective to achieve higher returns as their reward.

Keep reading to learn more about how survey data, investment research, and credible news reports explain the key differences in investing strategies between generations.

Baby boomers

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Millions of baby boomers are retiring each year, and their pace quickened during the COVID-19 pandemic, according to a 2022 Pew Research Center analysis. Financial advisors typically recommend moving funds into less risky investments in preparation of leaving the labor force and dipping into nest egg savings. Boomers would be expected to have their money in balanced portfolios and income-generating investments, including stocks that pay dividends and real estate investment trusts. A 2022 Toronto Sun article also noted that more boomers are physically and financially healthier to stay in their homes, instead of selling to downsize or move to retirement communities for their golden years. 

When it comes to socially responsible investing, Stanford University Graduate School of Business found that in 2022, two-thirds of investors 58 and older said they are only somewhat or not at all concerned about the environment and social issues. That contrasts with two-thirds of millennial and Generation Z investors, who are very concerned.

Generation X

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CNBC reported in 2018 that some financial experts describe Generation X as more willing to take risks in the stock market because they remember the 1990s, when markets were strong and hedge funds boomed.

Gen X investors are also likely to have cut contributions to their regular savings as a result of today's high inflation, but not to their retirement accounts, according to 2022 research from State Street Global Advisors. Among Gen Xers, just 1 in 20 said they've decreased the amount they're contributing to their retirement funds, compared with 18% of millennials and 11% of baby boomers.

Statistics Canada also found that young Gen Xers have accumulated higher levels of both debt and assets than older generations did at the same age. For example, at age 40, a Gen X head of household accumulates a median asset worth of $500,000 and debt load of $100,000. Meanwhile, a 40-year-old baby boomer had a median asset worth of less than $300,000 and a debt of about $30,000.


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When it comes to amassing median net worth, millennials outpace their Gen X predecessors, according to a 2019 release from Statistics Canada. Millennials aged 25-34 achieved a median net worth of $70,600—almost twice that of Gen Xers when they are at the same age. 

Millennials, as a group, are more digitally adept investors. They tend to be more comfortable with online research to guide their decisions, with at least two-thirds (67%) looking for computer-generated (robo) recommendations as a core aspect of their investment strategy, according to Accenture Consulting's 2017 "Millennials and Money" report. To learn more about investing, 65% would apply game-playing techniques to their portfolio. They want a platform that would enable them to get recommendations from social media and are interested in software that tracks transactions in real time, per the report.

If given $10,000, more than 20% would pay down debt and about 15% would invest in real estate, 2019 research from LendEDU found. Other places they would put their money before investing in the stock market? Education, virtual currency, retirement, and a savings account.

Generation Z

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Generation Z often turns to the internet or YouTube to learn about investing; that's according to 2020 research from the financial services company Morningstar, which surveyed 1,300 Americans ages 18 to 25. They commonly use at least one financial app to conduct their banking, budget, or investing, but technology does not displace human contact. Those surveyed put more trust in advisors than digital advice based on algorithms, and only 18% had used a robo-advisor, Morningstar's research found.

Meanwhile, 3 in 10 had seen a human financial advisor. As far as what they invest in, about 3 in 4 own stocks (73%), including growth and dividend stocks, according to an April 2021 Motley Fool survey—and cryptocurrency is also popular. They are less likely, however, to invest in mutual funds, according to the survey.

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