DIY Investor Magazine
/
March 2017
8
Simon Crinage,
Managing Director, is Head of Investment Trusts and is responsible for the management and
development of the Investment Trusts Business. An employee since 1984, Simon was previously
Head of Marketing & Communications for Europe, covering both institutional and retail clients. Simon
established the Investment Trust Marketing Department in 1987 and became Marketing & Product
Development Director of J.P. Morgan’s Investment Trust business in 1997. He also spent 5 years at
Jardine Fleming developing their mutual fund businesses in Hong Kong, Japan and Malaysia.
WHAT MILLENNIALS CAN LEARN FROM
GENERATION X
OLDER GENERATIONS OUTFLANK MILLENNIALS WHEN IT
COMES TO WEALTH, INVESTMENT AND RISK.
Investing in equities could bring opportunities for
dividend income and capital growth, but with the risk
that dividends might disappoint and share prices fall.
Since Theresa May took office as UK Prime Minister in
July 2016, equity markets have steadily appreciated in
value, and returns for equity investors have shot ahead.
The gains of 2016 may or may not be reproduced
in 2017. There are big economic questions to which
answers may only begin to emerge in the coming
months.
Could the US be on the verge of a trade stand-off with
China, and what might be the effect on world trade -
and corporate profits - of any protectionist measures by
the Trump administration? How might the early stages of
Brexit negotiations affect the outlook for business in the
UK and the rest of the European Union?
Faced with macroeconomic uncertainties in 2017,
making the right investment decisions will be a matter of
judgment.
Facing up to investment risk will be important.
This is an area where millennials - individuals born from
about 1984 onwards - could learn a lot from their older
counterparts among the Baby Boomers and Generation
X. Comparisons between age groups in the UK are
startling.
A report by the Resolution Foundation (‘Stagnation
Generation,’ July 2016), commenting on wealth
inequality between generations, suggested that
millennials are at risk of being the first generation
ever to earn less throughout their lifetime than their
predecessors.
Analysis by the Centre for Economic and Business
Research (‘The Big Squeeze, December 2016) showed
an increase in the wealth of the over 55s in recent years.
Data from the Office for National Statistics (ONS)
(‘Wealth and Assets Survey,’ October 2016) show
that older people are increasing their share of total
household wealth and assets in the UK with those aged
16-44 falling behind.
WHY GREATER RETURNS MAY COME FROM
INVESTING
There are various reasons for this wealth gap. Older
generations have benefited from rising property prices,
whereas fewer young people have made it on to the
property ladder.
Many older people enjoy pension rights under defined
benefit schemes, with guaranteed pensions based on
final salaries and years of service: most millennials will
