Most teens and young adults go through a period when they do the opposite of whatever their parents are doing. But when it comes to investing, the majority of young, wealthy investors in a survey by Merrill Lynch Private Banking & Investment Group believe their parents got it right.
Even though 88 percent of the respondents -- all between the ages of 18 and 35 with at least $1 million in investable assets -- are seeking growth in their portfolios, 65 percent believe their parents' approach to investing still works today.
The survey also shows that while the young investors seek growth, they aren't willing to put too much at risk for higher returns. Forty percent rely on a buy-and-hold strategy, rather than frequent trading.
Interestingly, although they feel their parents' investment approach is best, only 46 percent of young investors discuss finances with them. The majority turn to general and business television newscasts, national newspapers and magazines for financial and investment information. Only 27 percent rely on social media or blogs.
But they also care what their parents think, and feel pressure to live up to their expectations for success, according to Phil Sieg, head of the ultrahigh net worth client segment and solutions for Merrill Lynch Wealth Management. The fear of making financial mistakes is strong, "even among young adults already quite accomplished in their own right, such as professionals with advanced degrees or key contributors to a family business," he added in a statement. "But when they don't ask and parents don't discuss money, the absence of effective communication can jeopardize family wealth, harmony and even the transfer of certain values from one generation to the next."
Do you believe your parents are taking the right investment approach and do you ask their advice?
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