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BUSINESS Thursday 23 augusT 2018
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For many young investors, the stock market's only gone up

By STAN CHOE care of the decisions and
Associated Press often gave into the urge to
NEW YORK (AP) — Meet the sell stocks during a down-
generation of investors who turn.
haven't known a bear mar- "The main reason young
ket. people are not running
The U.S. stock market has away from stocks is they
been on the upswing for aren't figuring it out for
nine and a half years, themselves," said Jean
during which a cohort of Young, senior research as-
younger investors has nev- sociate for the Vanguard
er dealt with a 20 percent Center for Investor Re-
drop in the S&P 500 — the search.
classic definition of a bear And even though younger
market. Such a decline has investors haven't faced a
historically happened on full-blown bear market yet,
average every four or five they have had a few mini-
years. tests, with two drops of 10
That's nice for these 20- percent since early 2016.
and 30-somethings, and Through them, younger in-
their retirement accounts, vestors made more calls
but it raises the question: than usual to T. Rowe Price,
What will they do when the but they usually stopped
next downturn inevitably short of selling their stocks,
arrives? How they respond said Roger Young, senior fi-
will be crucial because this nancial planner at T. Rowe
generation bears a heavier Price.
responsibility for paying for If anything, market dips
their own retirement, as have only emboldened
pensions go extinct and In this Aug. 17, 2018, photo Marcus Harris poses at his home in Spring, Texas. Harris, a 34-year-old some, said Charles Adi, fi-
Social Security's finances physician in the Houston area who started investing about five years ago. nancial adviser at Blueprint
weaken. Associated Press 360 in Houston. During a
Few analysts are predicting tumble earlier this year, for
an imminent downturn for ing financial crisis of 2008- holds, at 41 percent, has proaches, they shed some example, he was balanc-
the S&P 500, which finished 2009, when the S&P 500 lost been on the upswing and stocks for bonds and other ing calls from older clients
Tuesday within 0.8 percent more than half its value, is much higher than the 23 safer investments. looking for reassurance
of its record, but they're has prepared them for the percent rate in 1989. Since Young people are much with younger clients hun-
much less confident about next downturn. They know then, the only time young more likely to have their gry to buy more shares of
2019 or beyond due to ris- the stock market more than investors were much more entire 401(k) in target-date stock.
ing interest rates and other made up all those losses, likely to own stocks was funds than older savers, "In 2008, it was unex-
market challenges. The eventually. around the dot-com bub- and the hope is that when pected," Adi said. "Now,
fear is that inexperienced They're investors like Mar- ble. the next downturn hits, a downturn is expected.
investors will panic at their cus Harris, a 34-year-old "All the ones I know, they do young investors will contin- They're ready for it. They're
first taste of a bear market physician in the Houston want to get involved," said ue to leave the investment waiting for it."
and sell their stocks, which area who started investing Kimelah Taylor, a 36-year- decisions in their hands. Still, there is the threat of
would lock in their losses. about five years ago. old accounting adviser in "Inertia in this case is work- overconfidence. Maybe
For young investors with "It's going to sound terrible, Houston who began invest- ing for them," said Jeanne young investors' nerves
decades to go before re- but I'm actually looking ing with a financial adviser Thompson, senior vice won't remain as steady as
tirement, conventional wis- forward to the next down- about four and a half years president at Fidelity Invest- they expect.
dom says the best bet is to turn," he said of the oppor- ago. "There is that delay ments. "In many cases, that "They think they're good
ride through and wait for tunity to buy stocks at a in when they get involved inertia will help when there fighters," said Danny Alex-
a recovery. The average lower price. "I know it's an because they're paying is a market downturn, and ander, a financial coach
bear market brings a loss overbought position right off student loans and other they'll probably leave their at Stangier Wealth Man-
of nearly 40 percent for the now, and I'm just sitting on things." assets and stay the course." agement in Portland, Ore-
S&P 500, but it typically lasts my hands saying, 'I can't Some younger investors In some ways, they're more gon, which recently hosted
less than two years, ac- wait.' Hopefully it will go to may also be in the market fortunate than older gen- an event for clients called
cording to S&P Dow Jones half the price, and I can without even realizing it. erations, who didn't have "Gearing up for the next
Indices. gobble up a lot of it." More employers are au- target-date funds to take crash."
Many experts say today's He's somewhat of an anom- tomatically enrolling their
young investors are gen- aly among his peers in that workers into 401(k) ac-
erally taking the right ap- he owns stocks at all. Only counts, and many of those
proach. For instance, many four in 10 households led by have a target-date retire-
are invested in the stock someone under 35 owned ment fund as the default
market through specialized stocks in 2016, according to investment.
kinds of mutual funds in their the most recent data from These funds automatically
401(k) accounts called tar- the Federal Reserve. Stub- change over time and cre-
get-date retirement funds, bornly low wages and high ate a portfolio that's appro-
which may keep them from debt are keeping many priate for an investor's age.
making rash moves. younger workers out of the When the target retirement
Some younger investors stock market. year is decades away,
also say the experience of Still, the ownership rate they're virtually entirely in
their parents in the wrench- among younger house- stocks. As retirement ap-