Notes From All Over, Part 3 -- December 27, 2019

First things first: Netanyahu quashes Likud leadership in landslide. On heels of Boris. Still a year away but a trifecta? With a Trump landslide?

FOMO. Headline over at the LA Times today -- "Stocks soared this year. Half of millennials missed out."

Although the market is poised to close a banner year hovering near record highs, the rally hasn’t helped half of the nation’s millennials, who either lack the means to knock on Wall Street’s door or are wary of doing so.

In the last two years, an average of 49% of millennials (ages 23 to 38) held stock directly or through mutual funds, exchange-traded funds or retirement plans such as 401(k)s at any given time, according to polling data that Gallup provided at The Times’ request.

That’s down sharply from an average 61% of Americans in the same age range in the 2001-2008 period, before markets were hammered by the financial crisis of 2008-09, an event that’s still one reason many millennials steer clear of equities, analysts said.

Millennials, now entering their prime earnings period, hold vastly less wealth than generations that preceded them. And the wealth gap between older and younger generations is widening. An analysis by the St. Louis Fed showed that in 1989, the median wealth of households led by people ages 65 to 75 was nearly eight times as large as the wealth of families headed by 25- to 35-year-olds. By 2016 the median baby boomer-led household had nearly 13 times as much wealth as the typical millennial household.

That’s in part due to the financial crisis that shaped the economy during millennials’ formative years — and the habits and fears they adopted at that time have, to some extent, kept them away from this year’s runaway market success.

“They’ve been tarnished by the damage that Wall Street did 10 years ago, and it’s in their psyche,” said Steve Nielander, a San Diego State finance lecturer and a partner at wealth management firm Cerity Partners.

As a result, they missed the market’s best performance in six years and the 11th year of the ongoing bull market that followed the crisis. Investors bid up prices despite the ongoing U.S.-China trade war, political turmoil surrounding President Trump and fears of an economic slowdown.