(Bloomberg) — The nouveau riche are trading old investment tactics for more crypto-heavy wallets and a passion for collectibles.
About 94% of Gen Z and Millennial investors are interested in collecting items such as watches, rare cars and sneakers, according to a new survey of wealthy Americans by Bank of America Corp. It was the highest rate of any generation surveyed, with only 57% of Baby Boomers expressing an interest in collectibles.
The results illustrate the deepening generation gap between Gen Z and Millennial investors and their Baby Boomer counterparts, according to the survey. With nearly three-quarters of wealthy young Americans saying that stocks and bonds alone cannot deliver above-average returns, the future of wealth is increasingly moving through alternative investments.
“Millennials and Gen Z tend to be interested in alternative assets,” said Drew Watson, head of art services at Bank of America Private Bank.
When identifying which sectors promise the greatest future gains, younger Americans gravitate toward the newest means of wealth growth. While real estate remained a top bet for both new and older investors, the youngest group – aged 21 to 43 – ranked cryptocurrencies and digital assets, as well as investing in a company or personal brand, higher than the older generation as bets with the greatest potential for growth.
Younger affluent investors hold roughly the same allocation of stocks, bonds, alts, and cryptos, regardless of whether they self-identify their investment strategy as aggressive, moderate, or conservative.
“Young people's portfolio choices suggest a shift in perspective between generations,” Bank of America said in the report. “Just as young and old people rank investment opportunities differently, their views on risk may also differ.”
Young affluent Americans cited social media as their primary source for financial news, education and advice — a seismic shift from older generations who favored more traditional news media.
“Half of young people prefer to get their financial content from social media, which can promote untested advice as easily as sources of researched and verified guidance,” the report said. Bank of America surveyed more than 1,000 respondents who had at least $3 million in investable assets.
Even as their confidence in traditional financial strategies wanes, more than half of affluent young Americans surveyed said the U.S. economy is “very good” or “excellent,” roughly double the rate of older Americans.