Americans in their 30s, 40s are getting richer faster than boomers — here’s how they’re outpacing their parents

“When Covid-19 roiled financial markets in March 2020, the average monthly net deposits for millennials remained much steadier than those of older generations,” says the Wealthfront report.

Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)

Regardless of your age, if you’re looking for investment success, the easiest way to improve your odds is to simply be more consistent.

Dollar-cost-averaging — investing a steady dollar amount on a recurring basis — allows you to buy more units of an index fund when the market dips and less when it’s frothy. In other words, it smooths out the volatility to a certain extent.

Instead of trying to pull back when the market looks overvalued, or waiting for a dramatic crash to invest, research suggests the best approach is to just consistently invest and ride out the volatility.

The S&P 500 has delivered a positive return in every 10-year rolling period over the past 82 years, according to analysis by Capital Group. [3]

A typical investor’s chances of a negative return are 33% if she remains invested for one year but that slides down to just 7% if she holds for five years and further down to 0% if she can hold for 10 years or more.

To be fair, it’s easier to ride out the volatility when you’re younger. If you’re retired and don’t have much time to wait for markets to recover you may need a more conservative approach.

But if you’re younger or a millennial, a long-term and patient approach should serve you well.

At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.

We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.

[1]. Wealthfront. “How Millennials Have Thrived in the Five Years Since Covid-19”

[2]. Wall Street Journal). “A New Generation of ‘Buy the Dip’ Investors Is Propping Up the Market”

[3]. Capital Group. “Time, not timing, is what matters”

This article originally appeared on Moneywise.com under the title: Americans in their 30s, 40s are getting richer faster than boomers — here’s how they’re outpacing their parents

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.