Investing: A family tradition

This morning, I came across what many would consider a rather surprising article in The Wall Street Journal. A survey from Bank of America Merrill Lynch’s Private Banking & Investment Group found that Millennials, those aged 18-to-35-years old, are likely to adopt their parents’ investment strategy – the “investing gene,” they call it.

The survey found 83 percent of respondents “somewhat or fully understand” their parents’ investing plan, while 65 percent said they adopt the same mentality. Surprisingly, less than half (46 percent) of respondents said their parents discussed investing and financials with them directly. Merrill Lynch survey 153 people with more than $1 million in investible assets. Given the response base, the data may be skewed toward the behaviors of those with larger bank accounts than their peers. Michael Liersch, a director of behavioral finance at Merrill Lynch, believes the findings can be universalized.

Liersch’s white paper looks at the generation further, analyzing everything from their investing habits to their attitude toward finance in general. Merrill Lynch found Millennials to be conservative, practical, and thoughtful when it comes to investing, a far cry from the stereotypical flippant new investor. Planning matters.

In light of a recent report that only 23 percent of Americans do not believe they will have enough savings to retire comfortably, the highest percentage recorded, it is comforting to hear the younger generations are smart investors. Yes, the data bias may be a factor in the results of Merrill Lynch’s survey.

Merrill Lynch's findings verified what I knew from experience. I grew up in a banker’s household. Finances were always a part of the discussion. Saving a percentage of my monthly paycheck and investing the maximum in my 401K have been ingrained into my head. Coupled with investing advice from my finance professor, I’ve had an investing strategy since my unpaid internship. It looks like I am not alone.

By Courtney Ridenhour