The stock market has left many gasping for air in the last few weeks.  Yet while we like to pretend that the market goes on vacation with the rest of us, historically, that is not necessarily true.  A typical reaction to this crazy August may be for investors to withdraw from the markets and hold their assets in cash or deposit accounts.  As you will see in our Spectrem Confidence Index being released next week, there may be many investors that are doing just that. 

But there is one generation that has been holding significant assets in cash for more than a year, despite the booming stock market.  And that may not be the right strategy.

Gen-Xers, currently between the ages of 40-54, have about 15% of their investable assets in deposit accounts.  Keep in mind that our research is generally with households with more than $100,000 of net worth not including their primary residence.  Throughout the years, Spectrem has tracked the amount affluent households hold in deposit accounts.  Prior to the Great Recession the average amount held in deposit accounts ranged from 4-6% of assets.  Since 2009 or 2010, that amount is closer to 7-9%.  But 15% is much higher than other generations.

Now there are lots of reasons that GenXers may need cash more than Baby Boomers or Millennials.  GenXers may have cash needs due to their families.  They may be paying for college or even paying for extracurricular activities.  GenXers may have elderly parents that they are helping.  Or they may be looking to buy a new boat or motorcycle.  Or a nice vacation?

GenXers are often ignored by researchers and marketers.  Falling in-between two enormous generations, the Baby Boomers and the Millennials, many fail to worry about these households.  But they are currently the generation that is accumulating wealth at relatively high levels.

We just completed a whitepaper on GenXers that you can access here. 

Many times we find that financial institutions will indicate that they have various strategies to attract specific segments of the population…that can range from Business Owners to Women to specific ethnic segments.  But rarely do organizations bother to pay for research regarding that specific segment…thus leaving their marketing efforts to be based totally on gut feeling rather than fact. 

Take this opportunity to learn more about GenXers.  Clearly their reluctance to invest provides an opening for conversation.  It’s time to direct their deposit accounts into something more meaningful.