Fear of risk is skewing investment decisions, survey shows
When it comes to long-term savings, many Americans are still afraid to take a risk with their money. The sting from the Great Recession is still too fresh.
In a recent survey, Bankrate.com asked people where they would invest the money they wouldn't need for at least 10 years. The top selection was cash, followed by real estate. The stock market was a distant third.
"The people who were most likely to chose cash as their preferred investment for money that they wouldn't need for at least 10 years were adults under age 30, and it was really a landslide," said Greg McBride, Bankrate's senior financial analyst. "They chose cash by a 3-to-1 margin over the stock market."
McBride says without taking a little risk with their long-term savings, these young adults may find it difficult to reach their retirement goals.
"We find that they're actually doing a good job of saving. They realize the important of saving, but in terms of that long-term investment stance, that allocation is out of whack," he told me.
More Info: Millennials Most Likely to Prefer Cash as Long-Term Investment