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Dear Millenials- Open Letter from the Stock Market

An open letter from the stock market

Dear Millennials,

While reading The Wall Street Journal I came across an article I found quite distressing. Apparently, your generation is flocking to my bastard cousin, real estate, in the hopes of securing your financial future. You're flippantly tossing around hurtful statements about how I "spook" you or putting your money in my grasp is nothing more than gambling. I am The Stock Market and I believe it's time the two of us have a little heart-to-heart.

Yes, there have been times I caused panic and destruction. Your history books teach you about Black Tuesday and your parents may have lost some money when I took a dive in 1987. Most of you are probably frightened by me because of what happened in 2008. I know I caused some of you to lose jobs while others graduated from college to face crushing unemployment rates. It makes sense why you view me as a wicked witch trying to lure you into a house made of candy, only to throw you in a stew. However, this is an exaggeration, which makes it clear to me you've spent more time debating whether or not to swipe right on Tinder than learning about me from reliable sources.  We can grow together.

My dearest Millennials, you are in the unique position of having what every investor craves: time. Time is exactly what will make you the next Warren Buffett. Well, that's a lie. Time can help, but few people can make me do their bidding quite like Buffett. Time is important because it helps you grow your wealth while sustaining future drops in the market. Time alleviates the pressure to quickly amass money in the later years of your life so you can retire. In fact, you can retire earlier if you learn how to master investing in your 20s vs your late 30s or heaven forbid into your 40s.

Speaking of retirement, how about those 401(k)s and IRAs you have all set up to prepare for your retirement? I've heard rumor you think those are enough to financially prepare for your future. First of all, jokes on you. If you have a 401(k) or IRA then you're most likely already in bed with me. And yes, those are great starts to prepare you for the future, but a key to wealth is diversifying. One 401(k) plan will not a rich man make. That money is meant to support you from traditional retirement age, around 62, until you die which could be 30 years later. And remember, Uncle Sam will still collect taxes on those funds if they are not in a Roth account.  If start teetering towards the point of outliving your stash of cash, then you better hope that you have really loving children.

For those of you interested in keeping all your surplus of money as cash in a savings account, I beg of you to think about the low interest rates. If you won't need that little nest egg for five or 10 years then why are you stuffing it away under the proverbial mattress by putting it in a low-yield savings account? Consider the potential of investing that cash in areas that have provided historically better returns.

While we're on the subject of diversifying, go ahead and invest in real estate but keep some funds with me too. The real estate market can burn you just as badly as the stock market. And even if the real estate is doing well, it doesn't liquidate into cash particularly quickly when you're in a bind.

If you're willing to commit to this relationship and become a long-term investor, then we can do well together. You need to be able to handle your emotions and remember to buy low and sell high. When I take a dip, don't run away screaming. Instead consider pumping more money into my waiting arms. While everyone else panics and sells, you can scoop up some cheap buys and watch as they begin to rise until you can sell high. Because the secret is: I'm a cyclical beast.

Your teachers probably told you that we should learn from history.  With that said, learn from the history of investing.

So my Millennials, I ask that you please reconsider your relationship with me. I can offer you both the danger of being with a bad boy and the power of being with one of the biggest players in the financial world. Plus, when you catch me on a good day I'm really not too hard on the eyes.

My most sincere love and gratitude,

The Stock Market


Important Disclosures:

Diversification and asset allocation strategies do not assure profit or protect against loss.
These are the opinions of Erin Lowry and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice."

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Thomas Bucklin, Registered Principal offering securities through Cambridge Investment Research, Inc. A Broker/Dealer. Member FINRA/SIPC. Investment Advisor Representative offering advisory services through Capital Investment Advisors, Inc., a Registered Investment Advisor, Cambridge, Capital Investment Advisors, and Fortress Financial are separate and unrelated companies.

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

This communication is strictly intended for individuals residing in the state(s) of CO, FL, IL, IA, MI, MN, RI and VA. No offers may be made or accepted from any resident outside the specific states referenced.

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