According to a new report by CFA Institute, 63% of Gen Z and millennial investors across six markets surveyed monitor or check their investment portfolios at least once a week. The survey included mass-affluent, high-net-worth and very-high-net-worth investors from India, Canada, Singapore, the UAE, the UK and the US. Additionally, 46% of young investors reported buying, selling or trading investments at least weekly, with the proportion rising to 52% among high-net-worth and very-high-net-worth young investors. The report also found that 40% of young investors consume market news daily, demonstrating high engagement levels with market information. However, as recent research highlights, within a single family, it is common to find deeply contrasting instincts about leverage, illiquidity, growth, and downside protection that are not just intellectual but emotional and behavioral in nature.
Investment experts emphasize that investing is a marathon, not a sprint, with the most common mistake being attempts to time the market or predict short-term movements. Studies consistently show that timing the market is extremely difficult, even for professional investors. Instead, the focus should be on long-term investing and avoiding emotional decisions based on market volatility. Market downturns are normal parts of the investment cycle, and attempting to sell during downturns can lock in losses, while holding on and allowing markets to recover can lead to significant gains. The historical performance of stock markets demonstrates this principle, with consistent positive returns over the long term despite numerous downturns. However, families frequently struggle with loss aversion and recency bias, where family members rarely feel comfortable adding risk during periods of stress, even when they understand intellectually that doing so may be appropriate.
A crucial component of long-term investment success is diversification across different asset classes, industries, and geographic regions to reduce risk. The principle behind diversification is that poor performance in one investment can be offset by strong performance in others. Younger investors with longer time horizons can afford to allocate larger percentages to stocks, while older investors closer to retirement should allocate larger percentages to bonds. However, specific allocations should be tailored to individual circumstances, considering factors such as income, expenses, and financial goals. Portfolio rebalancing is essential to maintain desired asset allocation, as market fluctuations can cause allocations to drift over time. The real challenge lies in persistently trying to reconcile fundamentally different investment identities within a single decision framework.
Before building investment portfolios, investors must honestly assess their risk tolerance based on their ability and willingness to withstand potential losses. Younger investors typically have higher risk tolerance due to longer time horizons, while older investors should be more conservative. Risk tolerance can change over time as circumstances evolve, making periodic reassessment essential. Professional advisers remain the most trusted source of investment guidance, while Gen Z and millennials increasingly combine professional advice with information from apps, social media, finfluencers and AI tools. Advisers are positioned to help younger investors manage behavioral risks such as FOMO and overconfidence while keeping investment decisions aligned with longer-term goals. However, the deeper work involves helping families accept that parents need to accept that children are now principals, not dependents, with both the autonomy and responsibility that entails.
