Young people might like to say that their elders don’t understand them, just as baby boomers and senior citizens may be mystified by the antics of those wacky millennials, but when it comes to stocks, the generation gap is pretty much nonexistent.
According to data from TD Ameritrade, which mined the holdings of its retail clients, there is a high overlap between the top 10 holdings of the millennial generation, Generation X, baby boomers and senior citizens, though there’s also enough divergence that the gains of seniors this year are nearly double that of millennials.
Five stocks are a top-10 holding for all four generations: Apple, Facebook, Amazon, Microsoft and General Electric. Another three — Berkshire Hathaway (the class B shares), Bank of America and Exxon Mobil — are held by three of the four.
Apple is the top stock for each generation, which shouldn’t be surprising. Not only is it one of the best-known brands in existence, and a stock that has risen in fairly uninterrupted fashion for years, but it is the largest U.S. company by market cap. As such, it is a core component — if not the top holding — for dozens of equity-based mutual funds and exchange-traded funds.
Similar reasoning could account for the other names, all of which are among the top 20 largest U.S. companies, as well as being bellwethers in their respective industries.
In each generation, there is at least one stock that isn’t a top 10 holding for the others. For millennials, there are two: Walt Disney Co. and Tesla Motors. While the former is a Dow component and just as established as the more widely held companies, it could have particular appeal to younger investors, given they are the primary target audience for such Disney properties as Marvel, Pixar and “Star Wars.” Electric-car maker Tesla, on the other hand, could be a popular choice given the predisposition of millennials to environmentalism. (That said, Tesla appears just below oil giant Exxon among their holdings.)
Disney and Tesla have been under pressure this year, with both down more than 10% in 2016. That has resulted in millennials posting the worst year-to-date performance of any generational group (assuming an equal weighting of holdings), though all four age groups beat the 4.7% gain of the S&P 500 SPX, -0.17%
Surprisingly, the generation of “Netflix and chill” doesn’t hold the streaming-media company as a top-10 holding. Instead, that outlier belongs to Generation X, where it is the generation’s eighth-most widely held company. The other company unique to Gen X is Google parent Alphabet Inc., which actually takes up two spots, with both its class A and its class C shares charting.
Baby boomers only have one outlying company, but it’s one that defined the technological progress made throughout their lifetimes: the old-school technology giant Intel Corp.
Seniors citizens were the only generation to eschew Berkshire, run by the 86-year-old legendary investor Warren Buffett. They were also the generation with the most unique portfolios relative to the other age groups. Three of their top 10 holdings don’t appear in the other generations: Johnson & Johnson, Verizon Communications and tobacco company Altria Group.
Telecommunications and consumer staples are both considered defensive industries, meaning they outperform in market downturns. The sectors also tend to offer dividend yields above the broader market, which has contributed to seniors’ year-to-date outperformance, as dividends have become a popular investment strategy amid low bond yields.
J&J, Verizon and Altria, in addition to being well-established brands, could reflect a preference on the part of seniors for a more conservative allocation. Younger investors, in contrast, can afford to be riskier, having more time to make up for any portfolio volatility.
See the top 10 holdings of each generation below.
| Rank | Millennials | Generation X | Baby Boomers | Senior Citizens |
| 1. | Apple Inc.AAPL, -2.25% | Apple Inc. | Apple Inc. | Apple Inc. |
| 2. | Facebook Inc.FB, -0.94% | Facebook Inc. | Facebook Inc. | AT&T Inc. |
| 3. | Amazon.com Inc.AMZN, -1.51% | Amazon.com Inc. | Microsoft Corp. | General Electric Co. |
| 4. | Berkshire Hathaway Inc.BRK.B, +0.36% | Bank of America Corp. | General Electric Co. | Exxon Mobil Corp. |
| 5. | Walt Disney Co.DIS, +0.80% | Microsoft Corp. | Amazon.com Inc. | Microsoft Corp. |
| 6. | General Electric Co.GE, +0.77% | Berkshire Hathaway Inc. | AT&T Inc.T, -0.74% | Facebook Inc. |
| 7. | Microsoft Corp.MSFT, -0.59% | General Electric Co. | Bank of America Corp. | Johnson & JohnsonJNJ, +0.53% |
| 8. | Bank of America Corp. BAC, +0.90% | Netflix Inc.NFLX, +0.36% | Intel Corp.INTC, -0.51% | Altria Group Inc.MO, -0.29% |
| 9. | Exxon Mobil Corp.XOM, +0.43% | Alphabet Inc. (Class A shares)GOOGL, -0.78% | Exxon Mobil Corp. | Verizon Communications Inc. VZ, -0.44% |
| 10. | Tesla Motors Inc.TSLA, -0.05% | Alphabet Inc. (Class C shares) GOOG, -1.06% | Berkshire Hathaway Inc. | Amazon.com Inc. |
| Average year-to-date return | 5.35% | 9.1% | 8.7% | 10.2% |
Data Source: TD Ameritrade
By Ryan Vlastelica
Source :http://www.marketwatch.com/story/senior-citizen-portfolios-are-nearly-doubling-the-returns-of-millennials-this-year-2016-10-26?mod=MW_story_top_stories
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