What to know about your generation's investment style

It is important to understand the typical investment style of your generation in order to apply the best investment approach, says Guy Fletcher, head: client solutions & research at Sanlam Investments.

Understanding means you'll be better placed to play to your strengths and understand potential pitfalls.

According to the 2018 Sanlam Benchmark survey, employers estimate that, on average, only 14% of their employees will be able to maintain their current living standard when they reach the age band of 60 to 65.

Fletcher adds that, at the same time, the essence of investing remains unchanged. The earlier you start the more opportunity compound interest has to work in your favour.

Furthermore, the more you can reduce your current consumption in favour of investing, the greater the "pot" will be at the end.

Fletcher outlines the main traits of each generation:

Generation Z

They are currently in their infancy, teens and early twenties.

Members of this "always-on" generation are highly tech competent and very adept at multi-tasking.

They have a natural affinity for entrepreneurship and grew up in a world of pervasive social media.

They're supposedly slightly cynical, but just as committed to experiences and finding meaning as their Millennial predecessors.

It's likely Gen Z's will favour tech-driven investing and, in particular, the changes that occur as a result of the fourth industrial revolution and artificial intelligence.


They are currently in their 20s and 30s and will make up half the workforce by 2020.

They are motivated by meaning and experience, with a drive for self-development. Led by a sense of purpose, they also thrive on affirmation, expecting continuous feedback and full transparency.

They’re adept at tech and immersed in social media, which has given rise to an expectation of immediacy. And they're passionate about causes. They're all about "money with meaning".

Millennials choose to invest according to their values - according to where they can make an impact. Additionally, they are the first generation likely to become true global citizens, says Fletcher.

Generation X

Currently in their 40s and early 50s, X-ers grew up in homes where dual incomes had become the norm.

With a "yes, we can" approach, this generation became synonymous with mass consumption and "keeping up with the Joneses" aspirational lifestyles.

They're also a generation that's been impacted by increasing divorce rates.

X-ers are sophisticated and tech inclined, with an increased openness to risk. They have tended to follow a more growth-oriented as opposed to income-based strategy.

They have also been open to investing outside of their home markets and understanding the value of diversification.

However, the downside of this aspirational lifestyle has been a predominance of chasing performance, often at a significant transactional cost and impact on investment results.

Baby Boomers

They are currently in their 50s, 60s and early 70s.

A Sanlam survey found that most Baby Boomers are prioritising saving for retirement – which makes sense given their age and life-stage.

This generation puts great emphasis on hard work and links its identity to respect and success earned in the workplace.

They earned twice what Millennials earn now at the same age.

However, they haven't been the best savers, and many retirees are having to find ways to supplement their retirement incomes.

Boomers tend to have a buy-and-hold mentality. Additionally, Boomers' "my home is my castle" mindset means many have invested in property.

The Silent Generation

They are currently in their 70s, 80s and 90s and known for making some of the most significant strides of all the generations in terms of wealth, longevity and education.

Having grown up amidst the turmoil of the Great Depression and World War II, this generation is synonymous with traditional values like loyalty and hard work, with tendencies towards frugality.

The Silent Generation typically stayed in the same job for 40 years. They adopted a very disciplined approach towards their work and careers with a high level of respect for authority.

The same approach applies to their investing style. They tend to follow the advice of "experts", pick an investment portfolio, and stick with it.

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