RIA Rising

Lower risk tolerance among higher education workers

Gen Y investors have been hammered by two market collapses in the past decade, leaving them leery of taking risk in their financial lives. A new report today by Fidelity Investments that surveys higher education employees across multiple generations appears to reinforce the trend.

Fidelity polled 600 workers in the field and found that Gen Y investors were using a similar asset mix (50 percent in stocks, 35 percent in bond/annuity, 15 percent cash) as were Gen X and baby boomers. It runs counter to traditional investment advice, which holds that people with a longer investment time horizon can handle higher risk than older folks with closer retirement deadlines. The report defines Gen Y as ages 21 to 32, Gen X as ages 33 to 46, and baby boomers as ages 47 to 65.

Regardless of where they fell on the age spectrum, a surprisingly sizable share of the higher education employees described themselves as averse to risk. Fidelity says 49 percent of all those who were polled described themselves as “conservative” investors. And more than half of the faculty in the poll said they would delay retirement or never retire.

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