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Why the Stock Market is a Must for Millennials

As an ordinary, everyday person, making sense of the stock market can be difficult. It is big, can be scary and there are a variety of opinions from various experts on the smartest way to invest your money. It can be both challenging and frightening, and if you are in the market every cent you put in is subject to the various ups and downs of the market over which you have no control. The Great Recession of 2008 further eroded working Americans’ confidence in the market, with the feeling that “the fix is in” being prevalent among many. This is particularly true among the Millennial Generation. According to a survey by Wells Fargo of about 1,400 Millennials, 52% are “not very confident” or “not at all confident” in the stock market as a place to invest for their retirement.

This sort of attitude is certainly understandable. Those of you who had the misfortune of having your college graduation and entrance to the workforce coincide with the Great Recession may have had trouble finding jobs in your field. Many of you have had to take whatever job you can find, because bills, student loans and being an adult doesn’t wait. Given that Wall Street was, in many circles, thought to be responsible for the economic collapse, Millennials’ hesitance to invest their hard-earned money in the stock market is a logical result. But retirement age will come eventually, and nobody wants to be 60 years old and have either nothing or not enough to retire on. Unless you are going to discover the next great invention that will change the world and make you millions, you need some sort of investment that will yield results and provide a nest egg for you to retire on. You need the stock market.

It is tempting, particularly when you are young, to live and think in the moment. But when determining the reliability of the stock market, one must look at history. Between 1937 and 2011, 67 of the 74 ten year periods have seen positive returns. The ones that did not (1937-1940 and 2008-2009) were tied to either the Great Depression or the Great Recession. It should be noted that this time period also saw several wars, a President being assassinated, a President resign, an oil embargo and the terrorist attacks of September 11, 2001. The stock market on average has gained about 7% every year since 1928. If you are in the stock market for the long haul, the rewards can be tremendous. Not only should Millennials be invested in the stock market, I would say they don’t have the luxury of not being in it. Given the questionable future of Social Security, young people must be particularly diligent about saving for their retirement, and the stock market remains the best vehicle by which to do so.

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