Here’ s an interesting chart from Bespoke Investments that may go a long way toward explaining the exuberance among some sectors of the stock market today (think FAANG type stocks). This shows the share of Millennials who say they are taking more or much more risk with their investment assets now compared to last year.
The Millennials are of course too young to have any battle scars from the dotcom bust. They may not appreciate the damage that can be done in the investment markets when valuations reach pie-in-the sky levels.
If the history of markets is any guide, it looks like Millennials who are loading up on the FAANG-type bandwagon are going to have to learn the same lessons their parents and grandparents learned during the last valuation bust.
There is no fear in the markets today.
Stay conservative out there.
Jeremy Jones, CFA
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