However, Millennials won’t be able to complain about their lot in life for much longer. They won’t have a right to, because they’re about to screw themselves over this time around, and they won’t have anyone else to blame for it. It turns out that they haven’t learned anything from their parent’s mistakes, as they dive into Wall Street and load up on tech stocks.
Young adult investors are buying shares in tech companies and avoiding dividend-yielding stocks favored by the general investing population, according to Steve Quirk, executive vice president of TD Ameritrade‘s Trader Group.
Quirk, citing a TD Ameritrade report, said
Tesla doesn’t crack the top 10 list for the general population, he said.
Quirk said these investing preferences make sense as long-term strategies for young adults with many years to invest ahead of them.
“Most of them are very interested in technology, but the biggest difference would be the dividend-yielding stocks,” Quirk said on CNBC’s “Closing Bell” Monday.
That should end well. They’re buying lots of stocks from Tesla, a company that can’t sell a single car when the government stops subsidizing them. They’re loading up Netflix stock,
In any case they’d be naive to buy any stock, much less tech stocks, which are arguably the most overvalued
Since July 2012 – so over the past five years – the trailing 12-month earnings per share of all the companies in the S&P 500 index rose just 12% in total. Or just over 2% per year on average. Or barely at the rate of inflation – nothing more.
These are not earnings under the Generally Accepted Accounting Principles (GAAP) but “adjusted earnings” as reported by companies to make their earnings look better. Not all companies report “adjusted earnings.” Some
This is the most optimistic earnings number. It’s the number that data provider FactSet uses for its analyses, and these adjusted earnings seen in the most favorable light grew only a little over 2% per year on average for the S&P 500 companies over the past five years, or 12% in total.
Yet, over the same period, the S&P 500 Index itself soared 80%.
It doesn’t take much research to realize that the stock market, and tech stocks in particular, are about to crash and burn. And yet members of the most research savvy generation failed to do their homework, and sunk their money into the most overvalued stocks. They fell for the same Wall Street hucksters that burned their parents in 2008. Now the poorest American generation; a generation that is still struggling to buy homes and start families, is about to lose what little they have.
- Source, Mac Slavo