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Why We’re Wrong About Millennials

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Businesses spend millions of dollars trying to understand them. News outlets write thousands of articles about them. And the public thinks they’re pampered phone-addicts that live in their parents’ house.

Millennials.

What are millennials anyway? There are a few ways to define this age group, but for clarity’s sake, we will define the term as Pew Research does. According to their chart, millennials were born between 1981 and 1996.

The world is fascinated by this demographic. Here’s a spattering of popular content about millennials:

In 2016, Inside Quest interviewed Simon Sinek about millennials and the video went viral with 11 million+ views. In it, he says millennials are lazy, narcissistic, entitled, and addicted to their phones.

A lot of people agreed with his views, but are these opinions a fair understanding?

This article seeks to explain why some stereotypes about millennials are inaccurate. Consider these thoughts on why we may be wrong about millennials:

Opinions about millennials are similar to every generation in history

Popular opinions about millennials include:

  • They’re pampered and spoiled
  • They won’t work hard and expect to be rewarded
  • They’re given everything, yet complain endlessly

But here’s the thing – adults have been saying this is about younger generations for centuries. Compare these quotes from the past and our current century:millennial_chart

Amazingly, people complained about young baby boomers the same way baby boomers complain about millennials. And you know what? When millennials get older, I bet they’ll complain about the younger generation the same way too.

This historical pattern reveals that millennials are not unique in these regards. In the 1950s, young people were apparently “pampered” by technology and preferred busses over walking.

In the 1990s, they said that the younger Generation X lived better than the previous generation but complained about life more.

Even 2000+ years ago, Aristotle said the youthful thought they knew everything and were insolent.

Sound familiar?

Are only millennials pampered complainers? Or are they just like every other generation of humans? The more logical conclusion is…

People change as they get older

If people progress properly, they become wiser and more experienced as they age. It’s natural for the older to view the younger as foolish and inexperienced.

Our older selves are significantly different than our younger selves. We should apply a similar grace to millennials. They will grow and mature as previous generations did.

Opinions on millennials downplay external factors

This is a frustrating injustice that all of us have experienced – being blamed for something that was beyond our control. There may be certain trends among millennials, but how much is due to circumstances they grew up in?

A few condemning stereotypes about millennials conveniently overlook external factors that were beyond their control. Here are two examples:

Tech advancement coincided with millennials’ coming of age

Have you heard that millennials are screen-centered, phone-addicted slaves to technology? Well, it’s partly true.

A study by Akademiai revealed female college students spend 10 hours a day on their phones and male college students spend 8 hours a day on their phones.

Part of this phenomenon has to do with recent technological advancements. Common in-person activities have evolved into online activities. For example, you can use your phone to…

  • Do banking
  • Email, text, photography, and video
  • Network on social media
  • Apply for jobs
  • Order food
  • Listen to music
  • Find a date
  • Research questions
  • Use handy tools like a calculator, dictionary, stopwatch, alarm, or notebook
  • Watch a how-to video

When you consider these developments it’s natural to conclude that people will be on their phones more, especially individuals who grew up with access to mobile devices.

If there’s a broken copy machine at work, someone is bound to watch a how-to video on their phone. If it’s ten minutes before lunch, someone will most likely order pizza through an app. Where employees used to play the radio while working, now they will opt to stream music on their phones.

Do people goof off on their phones? Absolutely. But not all phone usage is bad. It seems like millennials are ruthlessly thrashed for using their phones. Sometimes they’re just following a map app to a new location or reading current events.

Don’t forget about the ‘08 recession

Another common stereotype about millennials is that they do not work hard and are financially irresponsible. They live with their parents into late adulthood, spend too much on avocado toast, and have tons of student loans.

A study by Urban Institution revealed that millennials are less likely to be wealthy compared to previous generations at their age.

But is the financial state of millennials due to incompetence and poor work ethic? Research tells a different story. According to a U.S Travel Association survey, millennials are workaholics.

They surveyed 5,000 full-time employees and found millennials are more likely to forfeit vacation days than other age groups. Millennials were also more likely to agree with these statements:

  • “I want to show complete dedication to my company and job.”
  • “I don’t want others to think I am replaceable.”
  • “I feel guilty for using my paid time off.”

In other words, millennials are working hard, but they’re not making as much money.

When we combine these two studies, poor work ethic isn’t the issue affecting millennial wealth. The more likely conclusion is the poor state of the economy.

Thousands of millennials graduated college with huge student loans only to enter an American workforce shattered by a real estate bubble.

Investments were lost. Homes were foreclosed. In the months after the bubble burst, unemployment peaked at 10%.

With the rising cost of real estate and stricter lending standards, it’s no wonder that millennials are less likely to own a home than previous generations.

Opinions on millennials are rarely based on evidence and data

There’s a lot of talk about millennials, but it’s rarely based on evidence and data. A prime example is IQ’s interview with Simon Sinek, which was earlier cited. In this 15 minute video, Sinek doesn’t reference a single source for his opinions.

While Sinek has interaction with millennials, his experience is a tiny fragment of a huge demographic.

And he’s not the only one. There are some silly articles out there that are just baseless in their claims:

There’s tons of talk and ink spilled about millennials, but there isn’t a lot of solid, reliable information out there.

What’s worse is that readers have some experiences with millennials that match these theories and conclude, “Oh wow, that information was true.”

Eventually, so many people buy into these claims that readers suffer from groupthink. If the majority believes millennials are filling the void of their heart with houseplants, well then it must be true.

We need fewer stereotypes and more research

Jokes are good from time to time and every civilized society needs humor, but many of these stereotypes don’t accurately portray millennials. Just because content goes viral and a lot of people believe it, doesn’t mean it’s true.
To properly understand millennials, we need to actually study them and produce informed opinions based on research. Good places to start are Pew Research and Census.gov. You can also conduct your own surveys with SurveyHero.

Not only is this approach more ethical than rehashing stereotypes, but it will also help us navigate familial and business relationships. Millennials will be less misunderstood, and we will understand them better.

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Business

Market Loses 500 Points, More Pain Could Be In Store For Investors

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Market Losses 500 Points, More Pain Could Be In Store For Investors

With the Dow Jones Industrial Average dropping as much as 900 points yesterday before recovering to close out “only” 500 points lower, many are speculating that there’s even more pain in store for investors over the coming weeks.

One of the big differences with yesterday’s plunge was the stocks that slipped the most. Earlier in September, tech and growth stocks fell the most during the market pullback. Yesterday, it was the cyclical stocks that were heavily tied to economic recovery.

Sam Stovall, the chief market strategist at CFRA, wonders if the possibility of a second lockdown has spooked investors.

“Things had to have changed for investors to be so nervous. With Europe starting to see a sharp increase in Covid cases, does that mean they’re going to reimpose shutdowns?”

He also says that the weak recovery from the early-September pullback indicated more drops before the market would finally march higher.

“Because the recovery from the earlier Sept. 8 low was so anemic, it was an indication that the market needed to go through more backing and filling before it’s ready to advance.”

Technical analysts are now pointing to the 200-day moving average as a potential battle line for the markets. That currently stands at 3,104.

Scott Redler, a technical strategist and partner with T3Live.com, says the S&P 500’s next test could be the psychological level of 3,200 before potentially slipping down to the 200-day moving average. “I would say there’s a high probability we at least test 3,200 if not the 200-day.”

He added that the S&P 500 chart looks to be forming a head and shoulders chart pattern, which is a negative sign for stocks. “That would give us a measured move down to 3,136,” he said.
Redler said the market has been flashing warning signs that a bigger sell-off was in store.

“There are four or five things that are nipping at the heels of the market,” he said. “In the last two weeks there have been many signals that this kind of action could happen.”

Paul LaRosa, the chief market technician at Maxim Group, also thinks a larger market plunge is in store. He said he expects the S&P could dip as low as 3,100, and Nasdaq could drop under 10,000 if it breaks support at 10,639. He said the Dow should see support at 27,450 but could slip down to 26,000.

Stovall added that the markets are in a seasonally negative time. This comes with September the worst month of the year on average. He also warns that with the end of the month coinciding with the end of the quarter, losses could accelerate as big investors rebalance their portfolios before the month-end.

Peter Boockvar, chief investment strategist at Bleakley Advisory Group, says we could be seeing investors shifting back to the “work from home” stocks as fears of a second lockdown grow.

“I think some of it is that [cyclicals] had a good month. I think you have the algorithms that say to buy the stay-at-home names after the drubbing that went on in Europe, with the possibility of the U.K. crackdown again, and what that means for growth. To me, this is an allocation shift. Let’s go back to buying Zoom, Walmart and Peloton and selling anything that’s leisure or travel-related. The sell-off in tech that started in early September started a very different tenor in the market. We were on a much more vulnerable footing going into today.”

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Gold Will Climb To $2,200 An Ounce By Year End, Says Industry Insider

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Gold Will Climb To $2,200 An Ounce By Year End, Says Industry Insider

Ronald-Peter Stoeferle, the managing partner of Incrementum, says gold is in a “stealth” bull market. Additionally, he expects prices to climb above $2,200 per ounce by the end of the year.

Speaking with Kitco News, Stoeferle says proof of the stealth bull market in gold is actually silver outperforming gold and junior mining stocks outperforming senior mining stocks.

“It’s pretty obvious, we’re in a stealth bull market in gold. What are the reasons for that? First of all, we’re seeing that gold is rising in every currency. Gold is up 27% in US dollar terms, we’re seeing that silver is outperforming gold, so silver is up almost 50% since the beginning of the year, so the gold/silver ratio is falling is a great confirmation for the strength of gold. Then we are seeing that actually the mining equities are outperforming the price of gold itself, so we are seeing outperformance of the large caps versus gold, we are seeing the juniors outperform the seniors, those are all confirmations.”

A Sign of a Healthy Bull Market?

He says the recent pullback in gold prices is also a positive sign of a healthy bull market. Stoeferle says there was too much optimism as prices climbed and sentiment got too high.

“We saw that when gold went over $2,000 everyone was writing about gold and sentiment felt a bit too positive. Then we came down, but it seems that there’s so much capital waiting on the sidelines at the moment that we just don’t see any deeper correction. Can gold go to $1800, $1850? Of course. But it is just normal and healthy within the course of this bull market to take a breather.”

Institutional demand will take gold to $2,200 an ounce by the end of the year, according to Stoeferle.

“September from a seasonal perspective is one of the very best months for gold and I think we can easily go to $2,200 or even higher by the end of the year. The important message is we are in a stealth bull market, I think this party has only just begun, and we are seeing the most important driver going forward is the institutional demand is coming back and I think that is what is really going to move the price of gold.”

Benefits of Higher Inflation

He says that gold investors, mining stock investors and central bankers make odd bedfellows; all three benefit from one thing: higher inflation.

“Just look at inflation-sensitive assets like TIPS and also gold, silver, the commodity space, they are all rising pretty strongly in the last couple of months, so I think the market is already telling us: be careful, inflation is on the horizon. And that’s actually what the Federal Reserve and central bankers and politicians want. So you could say that gold investors and mining investors are basically sitting in the same boat as central bankers, which feels a bit odd.”

Very few investment managers have lived through a period of strong inflation or even stagflation, and Stoeferle says that means many will be caught under-invested as gold prices rise.

“The average investment manager nowadays is 52-years old so they have never experienced a period of long, strong inflation or even stagflation. So I think this will catch many, many investors on the wrong foot. And at the moment, 0.5% of all assets are invested in gold. So basically there is no allocation at the moment and this will change, and I think really this year marked the beginning of the public participation phase.”

That small allocation to gold will change as people start looking around for the best inflation hedge, says Stoeferle.

“I think with inflation being really what central banks and politicians want to see and want to achieve, many many investors will have to consider “what’s the best inflation hedge out there?” and I think gold made a really solid case not only over the last few decades but over the last couple of centuries.”

Allocation for Gold

Finally, he says a rule of thumb he has come up with is for 8% of your investment portfolio to be allocated towards gold. However, he acknowledges that there are many variables for each investor.

“We crunched the numbers and we came to a rule of thumb of 8-10%. But I think it doesn’t make any sense to stick to those numbers because it depends on the rest of your portfolio, it depends on your time preference, it depends on your risk preference and so on, but if you believe that inflation will become a concern, if you think that real rates will stay very low, if you believe at some point we will have to deal with our debt, then I think you should have a pretty high allocation to gold and also the mining space.”

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The Pandemic Is Transforming to Digital Economy

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Digital Economy-ss-featured

Even before coronavirus, paper money and coins are generally considered dirty. With a full-blown pandemic, people are less willing to go outside and buy items. And even when they did, they avoided carrying cash to use it to pay for everything. By September, the pandemic has changed the way people look at cashless transactions. And the companies handling this digital economy? They’re laughing their way to the bank.

RELATED: We Underestimate How Strong The Economy Will Be In 2021

Cashless is King

Last February, mobile payment company Square reported that 5.4% of its stores are cashless. By April, the number of stores jumped to 23.2%. The number went down to 13.4% in August when the government eased restrictions.

For the same Square vendors, 37% of transactions were cash. Once Covid-19 went full-blown, it dropped to 33% by August. Compared to the year before, it stood at 40%. Under normal circumstances, a 7% drop usually takes three years to happen. 

Only 13.2% of Square outlets accepted online payments last February. By August, that number rose to 40%. Meanwhile, contactless payments increased 6.6% from February to August, settling at 70%.

Square economist Felipe Chacon thinks the new normal has included methods of payment. He said: “These new findings show a significant and stabilizing increase in cashless adoption rates compared to pre-pandemic, with business owners reliant upon contactless and online payments and consumers utilizing those alternatives. This signals that COVID-19 has already had what will likely be a lasting impact on consumer behavior.”

Fintech Outperforming Traditional Banks

As cashless/online payment gained ground, financial tech owners began growing too. CNBC reports that the total worth of Square, Visa, PayPal, and MasterCard is $1.07 trillion. This amount eclipsed the market value of America’s big six banks. Together, the value of  JPMorgan, Bank of America, Wells Fargo, Citigroup, Morgan Stanley, and Goldman Sachs is below $900 billion.

Investors have rewarded these companies, pushing their stock prices to new highs. Visa has grown from $180.82 in August 2019 and is now $215.71 a year later. Mastercard shares now cost $366.12 last August 28, but it was $281.37 a year before. Paypal increased from $109.05 in August 2019 to $204.48 after a year. Square rose from $61.84 to $155.93 in the same period.

These companies are now pushing forward to make their brands provide more. Square announced last Tuesday that Cash-App users can now get their wages ahead of payday. This encourages cardholders to connect their app with their direct deposit payroll. Venmo, a PayPal subsidiary, also lets users access earned wages. Meanwhile, banks need to deal with increasing loan defaults and low-interest rates. 

The March of the Apps

With the pandemic, people have now ditched passbooks and purses and switched to apps. It’s not only bank apps, but also an investment and financial planning apps. People will likely stick with the apps even after the crisis blows over. 

In a CNN interview, Plaid CEO Zach Perret noted the increase in users. He said: “What we’ve seen is that consumers during this period have increased their reliance on digital financial services built by banks but also, built by non-banks.”

Plaid is the digital infrastructure provider that links bank accounts to the apps. From March to May 2020, Plaid’s partner firms recorded a 44% increase in new users compared to last year. Despite the pandemic, Plaid had to hire an extra 20% of workers to keep up with demand. “I think the pandemic has made it incredibly clear that digital financial services are here to stay,” Perret said. Visa and Plaid have earlier announced that the former will buy the latter for $5.3 billion.

PayPal expects 70 million users new accounts this year, double the rate from 2019. Even the traditional banks saw its users shift to its digital persona. Bank of America CEO Brian Moynihan reported an influx of a million mobile account users. 22% of them were senior citizens who used to resist the bank’s digital versions. Merill Lynch’s digital log-ins spiked more than 100% from 2019. Even Robinhood, the popular stock trading app, outpaced gambling apps. With American millennials stuck at home, they used the time to bet on stocks. Robinhood traders were instrumental in fueling a Wall Street rally earlier this year. Last May, the app reported adding 3 million new users.

Watch this as CNBC’s Closing Bell talks about how fintech demand has been affected by the pandemic:

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Digital transactions are fast becoming part of the new normal. Not only are they designed for the pandemic, but they will also offer convenience after the outbreaks have passed. Do you have digital accounts in place at present? If not, what is holding you back? Share with us your opinions on how you plan to participate in the digital economy.

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