Nearly two in five (38%) Gen Z expect to see noticeable growth in their investments within just a year, new research from Alliance Witan has found.
This compares to 30% of millennials, 20% of Gen X and just 15% of Boomers who expect noticeable growth within 12 months.
The research showed a fifth (20%) of Gen Z also expect to see growth in less than six months, almost double the 11% of Gen X who said the same.
Alliance Witan said younger investors seem less convinced of the merits of longer-term investment horizons, with less than one in three (28%) Gen Z willing to wait more than two years for significant returns. Meanwhile, just 17% are willing to wait more than five years to see their money grow.
The research also explored the barriers that prevent different generations from investing. Older generations are much more likely to express an aversion to risk, with 32% of Boomers and 24% of Gen X citing it as their main deterrent, compared to 19% of Gen Z.
In contrast, younger people are held back by a lack of knowledge or schedule constraints. One in six (16%) Gen Z cite a lack of understanding, compared to 9% of Boomers. Additionally, 12% state they do not have enough time to dedicate to investing, with just 1% of Boomers expressing the same sentiment.
Mark Atkinson, managing director at Willis Towers Watson, which manages Alliance Witan, said: “There is often a misunderstanding among beginners regarding what investing can realistically achieve over short timeframes.
“Our research illustrates a clear, two-pronged dilemma that can harm long-term wealth creation. While a lack of investment knowledge or an aversion to risk keeps many people on the sidelines, those who do enter are frequently fueled by unrealistic expectations of immediate market growth.
“Understanding time horizons, managing expectations, fostering patience and building a sufficiently diversified portfolio are all antidotes to common concerns when it comes to starting out with investing.”
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