Gen-Y Are Scared of the Stock Market

I kind of understand their fear but these numbers are quite scary if they continue for several decades.

This isn’t hypothetical. In a recent MFS Survey, 40% of Gen Y agreed with the statement “I will never feel comfortable investing in the stock market.” Among Gen Y investors, 54% feel overwhelmed by available choices and 47% tended to put off investment decisions. 

Due to fear of risk, 30% said their primary investing objective is protecting principal and have allocated an average of 30% to cash, more than other age groups, and nearly equal to the 33% allocated to stocks. T. Rowe Price noted in 2010 that almost one in five self-directed participants age 25-35 had over 80% of plan assets in cash. 

1/5 have 80% in cash? I have a feeling that the other 20% of that money is either in a treasury bond or a money market fund that is making less than 1%. Hopefully, someone can tell some of these Gen-Yers that a Vanguard Total Stock market mutual fund or even a vanilla S&P500 Index Fund would be much better use of that money. 

It seems that Gen-Yers are trusting financial advisers and lean on them quite a bit. Hopefully, these advisers don't turn into the next Bernie Madoff's absconding with billions in Gen-Y money. Clueless investors trusting greedy financial wizards always end badly.