til it dies, “even if it’s kind of clunky,” she
says. Advisers who spoke for this story
stressed that all situations are different,
but that generally, during crises like the
current recession, short-term priorities
that allow business owners to survive
take precedence over longer-term savings
goals like college funds.
Scott Hanson, cofounder and senior
partner at Sacramento-based Allworth
Financial, is a fan of young entrepreneurs
putting most everything back into their
businesses: They’ll end up making most
of their money through their business or
career rather than outside investments,
he says. “Business owners tend to have
the time to put a lot of sweat equity in,
and, at some point, can reap a pretty nice
harvest if the business gets to the point
where it’s acquired by somebody else,” he
says. “By and large, I’m a big fan of people
giving their business everything, particularly
in the younger years.”
But for young owners who still will
have the means to invest outside the
business, planners have advice that
many young adults may be skeptical of
— stocks as part of their portfolio. A Los
Angeles Times poll last year found only
49 percent of those ages 23-38 owned
stocks, down from 61 percent in that
age range in the 2001-08 period. And in
a 2017 Wells Fargo survey, 20 percent of
young adults said they’d never invest in
the stock market. Count Amber Rosen
among them. “It scares the hell out of
me,” she says. The couple does have a
401(k) and the college funds invested in
safe bets. Rubin says he doesn’t see the
stock market as a strong opportunity,
especially because the rate of return on
his business, until March, was dramatically
higher. He also senses a cultural
taboo about Wall Street among his
generation, many of whom are more
politically progressive. For those in this
camp, socially responsible investing
can be an option. Companies included
in socially responsible investment
funds generally are picked for their
strong policies that address issues like
environmental impact, fair treatment of
employees and communities, and good
corporate governance.
Their hesitation isn’t entirely misplaced:
Some planners think the market’s
long-term performance is bound
to worsen. Hanson says historically
stocks have performed about 6 percentage
points better than inflation.
“When you’ve got inflation running
at zero (percent) to 1 (percent), you
probably shouldn’t expect more than 6
percent” in average long-term returns,
he says. Financial adviser William
Bernstein, author of a book for millennials
on investing, told the Wall Street
Journal in September 2019 he expects
stocks to return about 4 percent a year
after inflation over the next decade.
There’s no guarantee the market will
grow at all: When inflation is factored
in, the Dow Jones Industrial Average
went through two 30-year stretches of
zero growth — 1929-58 and 1965-95,
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July 2020 | comstocksmag.com 59