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Vol. XIII No.12 - Sunday June 15, 2014 - Saturday June 28, 2014

Arts - Entertainment
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Real Estate: E-mail: [email protected]

Why the Millennials Aren’t Investing Now (And Why You Shouldn’t Worry)

By Don Freeman
Its hard to be a regular reader of Western newspapers or magazines and not read stories about the so-called “Millennials” or “Generation Y,” those born between the late 1970s or early 1980s up until the end of the millenium or so, struggling to find good-paying jobs or just make ends meet - let along have any spare money to invest in the stock market or pay into government retirement systems. But what do the problems of the Millennial generation mean for investors and should you be overly concerned about them?
To begin with, today’s stories about struggling Millennials would be familiar to older generations because if you were a younger “Baby Boomer” in a Western country graduating from high school or university in the 1970s, investing was the last thing on your mind because you probably entered adulthood facing high unemployment, stagnant or declining manufacturing economies, urban decay, soaring crime rates, violent strikes, oil shocks, terrorist hijackings, crippling inflation, corruption scandals at the highest levels of government, housing and commodity bubbles and don’t forget about the Cold War and the threat of nuclear Armageddon.
Things were so bad in the 1970s that at one point, New York City, the home of Wall Street, was essentially bankrupt (thanks to uncontrolled deficit spending) and required a bailout from the local teachers’ union pension fund after President Ford initially threatened to veto any bailout coming from Congress. Sound familiar?
In fact, some pundits even went so far as to predict the demise of the West and the eventual triumph of Soviet style communism while things weren’t much better outside the “West” as many of today’s hottest emerging markets were either trapped behind Iron Curtains, ruled by despotic regimes or plagued by coups or violent insurgencies.
However, everything changed in the 1980s and 1990s when the Soviet Union turned out to be a bankrupted paper tiger and entire new industries or technologies emerged - fueling a return of retail investors and especially Baby Boomers (who managed to “survive” the terrible 1970s) to the stock market.
It’s also worth remembering that both the so-called “Greatest Generation” and much of the “Silent Generation” who were either born before or during the Great Depression largely shunned stocks that weren’t utilities to invest in savings bonds or CDs. They did this not necessarily because of the 1929 stock market crash or an irrational fear of stocks but because many had defined pension plans while investing in savings bonds or CDs often meant double digit and largely risk free returns - something that’s a thing of the past in most countries.
However, many Baby Boomers who could no longer rely on defined pension plans made the twin mistakes of taking on too much risk and too much debt because they assumed asset prices (whether stocks or real estate) would keep on rising forever at a double digit clip. So if there is any generation we need to worry about, it would be the Baby Boomers.
And what about the Millennials? Sure, the job market and economic growth in the West appears tepid (just like in the 1970s) and many American Millennials are saddled with school loan debt, but certainly its too early to write off the entire generation that has also hopefully learned from the investing mistakes of their parents.
Moreover and just like the rise of the PC and the Internet helped to fuel the bull market of the 1990s, today we are seeing the rise of the smartphone or tablet replacing the PC along with the emergence of new and potentially revolutionary industries like 3D printing, cloud computing and clean tech. And even if Millennials in the West choose to largely remain on the sidelines, there are hundreds of millions of people living in emerging markets who are or are just entering the middle class and have yet to move beyond just depositing money into savings accounts or buying real estate or gold when it comes to investing.
In other words, maybe we should not worry too much as a new wave of investors will inevitably break into the stock market.
Don Freeman is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Phuket, Thailand. He has over 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email: [email protected]

Suzuki launches new Celerio at Central Plaza

Suzuki Motor Thailand launched its new compact car the Celerio at Central Plaza Chiang Mai Airport on June 1, 2014. The launch was presided over by General Manager of Suzuki Motor (Thailand) Co., Ltd. Wallop Treererkngam (4th left). Executive Vice President of Ariyakij G.P. Co., Ltd. Suphasiri Ariyawutyakorn (3rd left) welcomed and joined the ceremony that was hled on the ground floor. Suzuki’s new eco-car was launched in India in February 2014 and offers the company’s new automatic gear technology EZ Drive and fuel efficient driving.

HEADLINES [click on headline to view story]

Why the Millennials Aren’t Investing Now (And Why You Shouldn’t Worry)

Suzuki launches new Celerio at Central Plaza



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