How to Position Yourself for the $84Trillion Wealth Transfer

Just follow the money                                                                                                                                                                                                                                                                                                                                                                                                                 August 30, 2024 | [Listen Online]( | [Read Online]( [Teeka Tiwari]( & Houston Molnar [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20The%20Digital%20Asset%20Daily&body=How%20to%20Position%20Yourself%20Today%20for%20the%20Coming%20%2484%20Trillion%20Wealth%20Transfer%3A%20Just%20follow%20the%20money%0A%0Ahttps%3A%2F%2Ftiwariresearchgroup.com%2Fp%2Fposition-today-coming-84-trillion-wealth-transfer) How to Position Yourself Today for the Coming $84 Trillion Wealth Transfer The data is in… Over the next 20 years, we’ll see the single biggest wealth transfer in history. Nearly $84 trillion worth of wealth will be passed from the Silent Generation and Baby Boomers to their children and grandchildren. But these generations won’t manage that wealth like their parents and grandparents did. If you don’t know where they’ll invest in the future… You won’t know where to position yourself today. Fortunately for you, I’ll reveal where the data suggests this $84 trillion in wealth is headed – and more importantly, how you can get in front of it. Before we dive in, I want you to keep in mind that you don’t have to agree where younger generations invest their money. Nor share their beliefs about investing. However, if you ignore or dismiss what Millennials and Generation Z plan to do with the $84 trillion they’re set to inherit, you do so at your own financial peril. The End of Stocks and Bonds Dominating Portfolios For decades, the standard American investor’s portfolio was made up of stocks and bonds – with some cash available for emergencies. Over the past 30 years, the traditional portfolio composed of 60% stocks and 40% bonds would have returned 8.52% per year on average. Those returns have made Baby Boomers the wealthiest generation in history. According to Nasdaq.com, they’ve alone amassed $78 trillion in the U.S. That’s half of all wealth. But the traditional 60/40 stock-bond portfolio that worked over the previous 40 years likely won’t work over the next 40 years. In my view, there are two major reasons this strategy won’t perform as well in the future as it has in the past. The first is equity and bond returns are likely to be much lower in the future. The second is due to changing technological and social trends. Let’s start with the future performance of financial securities. Based on historical standards, stock valuations are trading near record highs. And inflation has driven interest rates higher. Today, the S&P 500 trades at roughly 30x earnings. That means for every $1 in earnings the companies in the index generate, they add $30 to their valuation. Over the past 100 years, the S&P 500’s average earnings multiple is roughly 16. So while stocks could continue to trade higher, it's more likely they’ll revert to the mean. Another way to measure the value of the stock market is the Buffett indicator, named after legendary investor Warren Buffett. The Buffett indicator is a ratio of the total U.S. stock market value relative to gross domestic product (GDP). Today, stocks trade at over 3x the value of the annual GDP. On a historical basis, the Buffett indicator is two standard deviations above the mean, suggesting the market is expensive. As for the bond market, inflation has driven rates higher over the past two years. And as rates go higher, bond prices go lower. While the Fed is making progress on its war against inflation, it's difficult to see rates headed back towards 0% due to concerns over inflation spiking again. And if bond prices don’t go lower, we won’t see a bond bull market like we did from 1980-2021. Given these potential headwinds, it’s no wonder 72% of Millennials and Gen Z no longer believe it’s possible to achieve above-average returns using the traditional 60/40 split. The other changes are technological and social… You might be surprised to learn that nearly 1 in 4 Millennials has saved $100,000 or more. That’s because the average millennial started saving for retirement at 24. Compare that to baby boomers… who didn’t start saving until 31. Innovations like auto-enroll 401(k)s and easy-to-use smartphone apps have made saving and investing easier than ever. And unlike the Baby Boomers, they grew up in the computer age… with tech literally in the palms of their hands. Digital currency makes more sense to them than physical dollar bills. They don’t even question it. These two macro trends (economic and social/technological) are heavily influencing the portfolio allocations of younger generations… Different Investment Worldviews In June, Bank of America released a study of Americans with over $3 million in investable assets. What the study found was shocking. I’m not talking about just a few small shifts between asset allocations. We’re seeing traditional asset classes replaced by new and emerging asset classes. Take a look at the chart below. It shows the asset allocations among different generations. As you can see, stocks make up 55% of the portfolios of older generations but just 28% for younger generations. In turn, younger generations favor alternative investments and digital assets over older generations. Younger generations also hold just over 3x more alternative investments than older generations. And they own 14x more crypto assets than their parents. Now look at this next table. It shows the most favorable investment opportunities for growth by age groups. The table is a bit complicated, so let me explain… Young investors see real estate and crypto/digital assets as the two greatest growth opportunities. For older investors, it’s equities and real estate. More importantly, crypto assets are at the bottom of the totem pole for older investors. You don’t need to be a rocket scientist to see where Millennials and Gen Z will allocate their investment dollars in the future. Follow the Money Look, you might not agree with the way younger generations allocate their money. And that’s perfectly OK. But I’m a Millennial. And I can tell you without a shadow of a doubt that when they start investing… bitcoin will be part of their retirement plans. One study from deVere Group, an independent financial advisory, reported more than two-thirds of millennials said they prefer bitcoin over gold as a safe-haven asset. If just 10% of the $84 trillion they’re set to inherit flows into bitcoin, it would easily send bitcoin prices to over $600,000 – a 10x move higher from today’s prices. That’s why Daily editor Teeka Tiwari considers bitcoin “the lowest-risk, highest-reward asset in the world.” But it won’t just stop with bitcoin. As younger investors begin to allocate the $84 trillion they’re set to inherit, some of that money will inevitably go into altcoins, too. If you want to position yourself to profit from the greatest wealth transfer in history today…You need to know which assets younger generations will buy in the future. And crypto will be a major asset class for them. To get started, simply add bitcoin, Ethereum, and Solana to your portfolio. These are the blue-chip tokens of the digital asset world. You can buy them on major crypto exchanges like Coinbase or Binance. If you prefer exposure through your brokerage account, consider the iShares Bitcoin Trust ETF (IBIT) and iShares Ethereum Trust ETF (ETHA). Full disclosure: I personally own all three of these tokens. That’s because they’re the bellwethers of crypto. By owning them, you’ll capture the bulk of the returns we’re going to see in the years ahead from this asset class. But if you’re looking for something with much greater upside (and a bit more risk), Teeka is bullish on six tiny tokens he believes have the potential to 500x your money. [You can get details about them right here.]( We’re about to witness the largest transfer of wealth in history. If you want to get wealthy from it, just follow the money. Regards, Houston Molnar Share The Digital Asset Daily You currently have 0 referrals. 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