Wealthy Millennial and Gen Z investors are skeptical of traditional stocks and bonds — and get their financial advice from social media

• Wealthy Millennial and Gen Z Americans are skeptical of traditional investments, per BoA.
• The survey found 72% of young investors don't expect above-average returns from stocks and bonds.
• In addition, half of young respondents said social media was their primary source of financial content.

Millennial and Gen Z investors are skeptical of traditional instruments like stocks and bonds, according to Bank of America's latest study of wealthy Americans.

Nearly three-quarters of respondents younger than 44 agreed with the statement, "It is no longer possible to achieve above-average investment returns by investing solely in traditional stocks and bonds."

By contrast, only one quarter of Gen X and older respondents held that view, similar to the responses in 2022, Bank of America said.

Out of a dozen options, stocks and bonds ranked near the bottom for younger investors in terms of growth opportunities. Real estate, crypto, and private equity topped their list.

Meanwhile, more than 40% of Gen X and older investors ranked domestic stocks as the best opportunity for growth.

"The younger cohort actually holds fewer stocks, though traditional allocation models would typically prescribe them higher stock exposure," the bank noted.

The study included 1,007 respondents over 21 with at least $3 million in investable assets.

"If these investment preferences actually are a marker of cautious mindsets, the past could be to blame," the report continued. "It's easy to see how a two-and-a-half-year bear market (2000-2002) and a 50%+ loss in stock prices (2008-2009) could instill skepticism about the stock market in a generation of wealthy Americans."

In addition, nearly half of millennial and Gen Z respondents said social media was their primary source of financial content, followed by online articles and videos. (The survey did not ask about astrology or tarot cards.)

Older investors expressed a preference for online articles, newspapers, and television for their financial news and information.