Reuters / Mario Anzuoni
- Sara Rajo-Miller manages $450 million for the ultrarich, and Forbes just named the 28-year-old one of the most successful young people in her profession. She thinks millennials have a surprising advantage as they begin building their wealth.
- While some experts are concerned that a lot of millennials have never experienced a downturn in their investing lives, Rajo-Miller says it’s encouraged them to be consistent and focus on the long term.
- Older investors have different needs, but she notes that many of them are quick to flash back to the losses they suffered after the global financial crisis of 2007-08.
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One way to be brave is to not know that you should be afraid in the first place.
The longest bull market in US history has brought stocks to record highs and generated huge returns for investors, but the decade-old rally has also prompted some experts to worry that younger investors won’t recognize signs of a looming downturn and won’t know what to do when it arrives.
Wealth advisor Sara Rajo-Miller, who — at 28 — is also a millennial, says it’s true that her clients aren’t preparing for the worst. But she says that’s actually good news: Even if it’s unintentional, they’ve adopted exactly the right strategy for building wealth.
"From an investing perspective I would actually almost say that that’s to their advantage," she said in an exclusive interview with Business Insider. "Our age is our biggest asset if you look at the time horizon that we have."
Rajo-Miller manages about $450 million in wealth for Miracle Mile Advisors, a $1.8 billion firm in Los Angeles. Forbes just named her one of the top next-generation wealth managers. And she says it’s ultimately fine if millennials aren’t scouring for signs of market weakness because it shouldn’t dictate their approach.
"You should not be pulling your money out because you think things are slowing," she said. "You can make small shifts, but it doesn’t require you to drastically change your asset allocation."
After all, there have been plenty of periods in the last 10 years when it looked like the bull market was wrapping up or a recession was coming. That includes the final months of 2018. And the pain the global financial crisis of 2007 and 2008 inflicted on investors is hard to forget.
As a result, Rajo-Miller says she often finds herself meeting with older clients and tamping down their impulse to make drastic moves when stocks reach new highs or the economy looks sluggish.
"They’re the ones more often than not that are coming to me and saying ‘I think we should go to cash,’ (or) ‘I think that a recession is coming, we should take half our portfolio and literally put it under the mattress,’" she said.
The two groups are in very different financial positions, but someone who got out of the market last year would have missed out on big gains. That pattern has repeated itself for years, and missing out on those rallies might’ve been worse than taking the losses stemming from a recession or a bear market.
By contrast, millennials are having an easier time maintaining a consistent approach to investing, and Rajo-Miller says that’s clearly the right choice for someone who might have 30 years or more until retirement. In her opinion, people who try to dodge bear markets are making their lives much more difficult.
"Trying to time the markets is not a good strategy, especially for someone who does have a long horizon," she said. "If you’re trying to time the market you have to be right twice: You have to get out at the right time and then you have to get back in at the right time."
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