Gen Z adults have less investment patience than older generations

Younger people have less patience when waiting to see returns from their investments than older generations, a study from Alliance-Witan has shown.

It found that 38 per cent of Gen Z adults expected to see ‘noticeable growth’ in their investments within one year.

This compared to 30 per cent of Millennials, 20 per cent of Gen X, and 15 per cent of Baby Boomers expecting noticeable growth within a year.

One in five (20 per cent) Gen Z adults wanted to see investment growth in under six months, while just 11 per cent of Gen X and 7 per cent of Boomers shared this short-term expectation.

Alliance-Witan noted that younger investors appeared to be unconvinced of the merits of long-term investment horizons.

Fewer than a third (28 per cent) of Gen Z were willing to wait more than two years for significant returns, while just 17 per cent were prepared to wait more than five years to see noticeable growth.

However, it was not risk aversion that was deterring younger people from investing, with older cohorts more likely to express an aversion to risk.

Gen Z adults were more likely to cite a lack of knowledge or schedule constraints as barriers to investment than older generations.

“There is often a misunderstanding among beginners regarding what investing can realistically achieve over short timeframes,” said Willis Towers Watson managing director, Mark Atkinson.

“Our research illustrates a clear, two-pronged dilemma that can harm long-term wealth creation.

“While a lack of investment knowledge or an aversion to risk keeps many people on the sidelines, those who do enter are frequently fueled by unrealistic expectations of immediate market growth.

“Understanding time horizons, managing expectations, fostering patience and building a sufficiently diversified portfolio are all antidotes to common concerns when it comes to starting out with investing.”

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