There is a wide divergence between the risk tolerance of Baby Boomers and Generation X investors, with the Gen X investor far more willing to take a chance, according to Spectrem’s Ezine Baby Boomers vs. Gen X.
Gen X investors are more likely than the average investor to be willing to take a significant investment risk in order to earn a high return on the investment. The Baby Boomers, on the other hand, are less likely to take a significant risk in hopes of getting a higher return.
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Among all investors, 37% said they are willing to take significant investment risk in exchange for the possibility of a higher return. But 66% of Gen X males with a net worth under US$1 million said they would do so, and 59% of Gen X males with a net worth over US$1 million said they would endorse the risk.
In comparison, only 35% of Baby Boomers with a net worth of under US$1 million would do so, and 47% of those with a net worth over US$1 million would take the risk.
The percentages are similar among females. Sixty percent of Gen X females with a net worth over US$1 million were willing to consider the risks, while only 28% of Baby Boomer females in the same wealth segment would do so.
Forty percent of Gen X females with a net worth under US$1 million would take the risk, while only 22% of Baby boomers in that wealth segment said they would go for it.
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By GlobalDataRisk is not a determining factor for Gen X investors in selecting an investment. While 91% of all investors said "level of risk associated with investments” was a factor in selecting an investment product, only 72% of Gen X females and 86% of Gen X males agreed that risk was a factor.
Baby Boomers, however, were more interested in the risk level, with 95 of females and 92% of males saying the level of risk was a factor in choosing an investment.
