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They say the body keeps the score when it comes to personal trauma, but what about financial trauma? Americans who grew up in the Depression, studies show, were so scarred by the financial calamity that they never embraced investing in risky assets — and were poorer for it. Now there is evidence that members of Gen Z, most of whom entered adulthood during the pandemic and have borne the brunt of the economic aftermath, are suffering from financial trauma.
One study suggests that members of Gen Z in China have become much more risk averse, which does not bode well for China’s future. It also raises the question of how America’s Gen Z may be held back financially.
One thing I love about finance is how someone’s investing habits reveal their true feelings about risk. Each generation experiences different financial setbacks, and while every individual has their own preferences for risk, events can shape people’s relationship with investing.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.