One thing the financial media gets right (surprisingly) when discussing the behavioral economics of households during recessions is that younger American households “sell low” during periods of distress far more than any other demographic range.
In particular, the white paper “Wealth Disparities Before and After the Great Recession” analyzed the investment behaviors of Americans from 2007-2011 and found that the hardest hit demographic in terms of net wealth over a four-year period was households that involved members in the age 25-34 demographic.
In 2007, the American households that held stock and were in the 25-34 age range had $34,834 in stock market wealth. In 2011, those individuals who were in the 25-34 age range in 2007 had $7,842 in total stocks invested.
Those numbers blow me away. Sure, I’ve seen the anecdotes interviewing people who sell stocks during the recessions and say things like “the stock market is … Read the rest of this article!