Rachael Westgate, Wealth of Geeks
Rising interest rates, sustained inflation, and a slow move out of a bear market mean Americans with cash to spare are proving particularly calculated about their investments as of late. A recent study shows, however, that some generations are better at investing than others.
Research on the wealthiest investors of our time reveals that the Silent Generation, Baby Boomers, and Generation X are making strategic and fruitful investments, while Millennials and Generation Z are getting left behind.
With further forecasts from the Fed indicating additional hikes may be on the way, knowing what sets successful investors apart is worth its weight in gold.
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Wealthiest investors by generation
According to researchers at Top Brokers, Baby Boomers, and the Silent Generation comprise seven out of the top ten slots for the wealthiest investors of our time. Investors in Generation X filled the remaining slots, rounding out the list. Each individual’s net worth and portfolio values showcase their successful investing strategy and philosophy. The list includes famous names like Warren Buffet, Jim Simons, Bill Gates and Cathie Wood, and others that may be less familiar.
• The Silent Generation (Born 1925 to 1945)
Warren Buffet tops the list with a portfolio valued at $337 billion and a net worth of $109.7 billion. Joining him are Jim Simmons, with a portfolio of $77 billion and a net worth of $28.1 billion, and Charlie Munger, with a portfolio valued at $23 billion and a net worth of $160 million.
• Baby Boomers (Born 1946 to 1964)
Four of the top ten investors are part of the Baby Boomer Generation: Ken Fisher (portfolio of $162 billion and net worth of $6.7 billion), Bill Gates (portfolio of $39.2 billion and $109.9 billion), Ray Dalio (portfolio of $19 billion and net worth of $19.1 billion), and Cathie Wood (portfolio of $14 billion and net worth of $140 million).
• Generation X (Born 1965 to 1979)
Ken Griffin, Li Lu, and Michael Burry represent Generation X on the wealthiest investors list. Ken Griffin’s portfolio is worth $84 billion, and his net worth is $35 billion. Li Lu has a portfolio of $2 billion and a $200 million net worth. Michael Burry has a portfolio valued at $44 million and a net worth of $300 million.
• Millennials (Born 1980 to 1994) And Generation Z (Born 1995 to 2012)
Based on portfolio values, no Millennials or Generation Z investors made the list. According to Top Brokers, only 30% of Millennials invest in the stock market, compared to more than half of Baby Boomers (51%) who choose to invest.
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Industries favored by top investors
When examining the industries of choice for the top 10 wealthiest investors of our time, Top Broker found that healthcare was the number one choice for 90% of them. Other investment-friendly industries included technology and energy, which appeared in 80% of portfolios, and finance, which featured in 60%.
Notably, technology stocks like Apple, Amazon, and Microsoft, which offer the potential for long-term growth, proved very popular among these investors.
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An analysis of findings
Top Broker researchers conclude that the investment prowess of Baby Boomers may be due to their willingness to take risks, their experience over time, and their first-hand experience of living through turbulent economic climates like the dot-com bubble and the 2008 financial crisis.
Generation X may amass their investment wealth thanks to the rise of the internet and the availability of a high volume of data and analysis tools.
Millennials and Gen Z investors, while also being the youngest on the list and therefore having the disadvantage of less time in the market, face significant financial challenges like low wages, high cost of living and rising student debt.
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Starting your investment journey
Individuals looking to begin investing may feel overwhelmed. The advice from the pros? Start early, and stay consistent.
“Smaller investors who are just getting started in the investment world have plenty of options to choose from. We recommend getting familiar with what their employer offers in their retirement plan and learning about those options. For those without that work benefit, we like to use ETFs for their low cost and tax efficiency. The message to smaller investors is to be consistent in investing. You can set up an automatic deposit from your bank account on a monthly basis, so you won’t forget to do it, and will benefit from dollar cost averaging.” Says David Berns, Financial Planner at Truadvice Wealth Management.
“Successful investing is about having a disciplined strategy that focuses on long-term protection and growth.” shares Sean Polley, Private Wealth Manager and CEO of Polley Wealth Management.
“We speak about investing as a path to follow on their [client’s] journey to retirement and beyond. The first step is to take a personal inventory of their investments, contribution levels, company matching level and current investment risk level. We compare that to their personal comfort with risk and what we believe they should require to retire comfortably on.” Shares Jon McCardle, President of Summit Financial Group of Indiana, “Investing is a game of inches, not feet, and it is a marathon done over 30-40 years. In our opinion, the biggest factor of success for investors is maximizing contributions and company matching as soon as possible, and holding it for as long as their working career allows regardless of good markets and especially during bad ones.”
The market will continue to ebb and flow, but according to experts, there is value in weathering market changes for long-term growth for folks looking to build their investment portfolios.
