Move Over Boomers: Millennials Surpass Expectations in This Investment Category
This week, we’re taking a closer look at some significant economic movements, and we’ve got an intriguing surprise for you: Millennials are leading the charge in a important investment area you wouldn’t expect.
Let’s dive right in and explore the latest updates:
📊 Wages on the Rise after 26 Months
According to the latest data from the Bureau of Labor Statistics, U.S. workers’ real weekly earnings, or inflation-adjusted wages, have seen their first annual growth in 26 months. June witnessed about a .5% increase in annual real weekly wages, just below the gain seen in February of 2020.
💰 Gold Hits a 2-Month High
The prices of gold have reached a two-month high, mainly due to a weaker U.S. dollar and a possibility that the Federal Reserve might halt its hawkish rate-hiking cycle in the next meeting. Spot gold rose by about .2% to $1,981 per ounce, nearing its high point since May at $1,987.
💳 Majority of Americans Regret Financial Decisions
A recent survey conducted by Bankrate reveals that roughly 74% of American adults have some form of financial regret. The most common include not saving enough for retirement early on (21%), accumulating too much credit card debt (15%), and not setting aside enough for emergencies (14%).
🚔 Arrest Made in $278,000 Celtic Gold Coin Theft
Good news for history and culture enthusiasts! The thieves behind the stolen 483 Celtic gold coins from the Kelten Römer Museum in Germany have been caught. Authorities used DNA evidence to link three of the four men to a series of heists dating back to the 1990s, involving treasures from both Germany and Austria.
📉 Bernanke’s Take on Fed Rate Hike
Former Fed Chair, Ben Bernanke, believes that the approaching interest rate hike could be the last one in the current cycle of credit tightening. He expressed this view during a Fidelity webinar, suggesting a possible 25 basis point increase at the next meeting, which might finally halt the rate-hiking cycle.
Trouble Ahead: Yield Curve Points to Possible Economic Downturn
The yield curve, a critical economic indicator, has recently shown a concerning pattern. The difference between the yields of 2 and 10-year Treasuries has inverted to its lowest point in 42 years, sparking fears of an impending economic downturn.
A yield curve illustrates the yields of bonds with equal credit quality but differing maturity dates. In a strong economy, the curve slopes upward, signifying higher yields for long-term bonds to compensate investors for the added risk.
However, an inverted yield curve occurs when short-term bonds yield more than long-term bonds, indicating a lack of confidence in the economy’s future performance. Investors tend to move toward long-term bonds in such situations, pushing up their price and lowering their yield.
The current deep inversion of the yield curve is especially notable since a similar inversion in 1979 was preceded by the early 1980s recession. While an inverted yield curve has historically foreshadowed recessions, it’s not a foolproof predictor, as various other factors also influence economic trends. Nonetheless, we may still see some hard times in the economy moving forward.
FedNow: The Latest Competitor Shaking Up Venmo and CashApp’s World
The Federal Reserve has introduced FedNow, an instant payment service that enables consumers and businesses to conduct swift transactions through their banks, 24/7. This system allows immediate access to funds between bank accounts, setting it apart from apps like Venmo, checks, ACH, and wire services.
The service comes with a request for payment fee of just one cent, considerably lower than Visa’s, which is around 2.5%.
Even though FedNow offers significant advantages over existing payment systems, it still relies on banks as intermediaries and may not provide the same level of control over funds and user privacy as gold and crypto advocates prefer.
Gold Rush: Why Millennials are Betting Big on Precious Metals
A stunning trend in investment shows that millennials are outpacing baby boomers and Gen X-ers when it comes to gold investments. A State Street report, cited by Business Insider, highlights some fascinating survey findings from SPDR ETFs:
- On average, 17% of millennial investments are moving to gold, a notable increase compared to the older generations’ 10%.
- Around 88% of those holding gold consider it a long-term investment, with over 70% believing it positively improved their overall portfolio performance.
- More than half of those with gold holdings plan to boost their gold investments in the next 6 to 12 months.
Given their experiences with economic crises and market fluctuations, millennials seem drawn to investments that offer stability and wealth preservation.
However, if millennials seek the protective benefits of gold, owning physical gold bullion may be a better option. While gold ETFs offer exposure to price movements, physical gold bullion remains a tangible asset with a long history of being accepted as money worldwide.
Join the growing number of investors turning to gold, as it’s never too late to get started.
