Many said they will withdraw more from their investment portfolios
ARLINGTON, Va., November 22, 2021–(BUSINESS WIRE)–E*TRADE Financial Holdings, LLC today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results suggest young investors feel confident in their finances and are feeling ready to spend this holiday season:
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(Graphic: Business Wire)
Young investors are ready to take on holiday shopping. The majority of investors under the age of 34 (93%) said they feel financially prepared for the holiday season. And they feel ready despite growing inflation concerns—63% noted they’re worried about inflation, up 9 percentage points from last quarter.
Though young investors are more likely to withdraw from an investment portfolio to fund holiday spending. With the market hitting record highs, nearly three out of four (74%) Gen Z and Millennial investors note they will withdraw more money from their investment portfolios to fund the holidays.
But the wide majority aren’t using retirement savings. Among the reasons why young investors have withdrawn early from a retirement account, holiday expenses ranked last (10%). Paying for a medical emergency (26%) and funding a large purchase (23%) topped the list.
“After the market’s incredible run, it’s understandable for investors to profit-take to fund holiday spending,” said Mike Loewengart, Managing Director of Investment Strategy at E*TRADE Financial. “But keep in mind that if you’re too quick to draw from an investment account, you could miss out on potential upside. Staying committed to your long-term goals and initial investment strategy is key—consider your savings and investments as separate entities. Holiday spending comes around once a year, so stashing a bit more away in savings can help lighten the burden at year-end.”
Mr. Loewengart offered additional tips for young investors who are looking to save and invest:
Stay diversified. A balanced portfolio can help investors ride out market swings, and though this strong bull market has pushed portfolios higher, it’s better to be prepared. If you take out from an investment account, be mindful of your portfolio allocations. Selling too much of one security can throw off the balance of the portfolio you’ve built to align to your goals.
Consider tax loss harvesting. If you are going to take from an investment account, consider selling underperforming assets to offset capital gains—…….