Those aged between 18-35 years old, ‘millennials’, have unrealistic income expectations and are prone to short-term investing according to a study by UK-based asset manager Schroders.
The firm’s study of 20,000 end investors in 28 countries found that there were general unrealistic expectations among investors, with the average level of desired income standing at 9.1% per year. Schroders said that with many countries’ interest rates at historic lows, “plenty of investors look set to be disappointed”.
However, millennial expectations were even more unrealistic, with a minimum desired income of 10.2% per year. There was also a bias towards short-term investing, which is more pronounced among millennials, who invest for 2.3 years. This compares to the average investment horizon of a little over three years globally (3.2).
The study also found that millennials prefer to invest for immediate financial requirements, rather than long-term gains. Compared to older investors, they were also more likely to invest to supplement their salary and buy something other than a home.
“Investors’ short-term outlook and unrealistically high return expectations raise concerns that investors could be left disappointed,” said Gavin Raiston, head of thought leadership at Schroders.
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