The global financial crisis of 2008, which erased 4.3% from U.S. GDP and toppled Lehman Brothers and Bear Stearns, remains a defining trauma for many market participants. But a growing cohort of investors under 40 has no direct memory of that turmoil, and that may be reshaping risk appetites across the wealth-management landscape, according to Alicia Levine, head of investment strategy and equities at BNY Wealth.
“The 30-year-old of today did not experience that, the 35-year-old of today did not experience that, and the 40-year-old of today was 22, so they probably didn’t have a lot to lose at the time,” Levine said. She argues that this generational gap in lived experience is fostering a more risk-tolerant mindset among younger investors, who have instead been shaped by a series of sharp but short-lived market dislocations.
Levine points to the 2020 Covid crash, which sent the S&P 500 down 34%, and the 2022 bear market triggered by 9% inflation and aggressive Federal Reserve rate hikes. In both cases, the economy avoided a recession, reinforcing a “buy the dip” mentality. More recently, the market selloff and rapid recovery following President Donald Trump’s “Liberation Day” tariff announcement in April 2025 further validated that pattern, she noted.
Data from Betterment’s 2025 Retail Investor Survey supports the thesis: younger investors displayed resilience during periods of intense volatility and leaned into financial planning rather than fleeing to cash. Levine also observed that retail investors are becoming active in their teens and twenties at rates unseen in prior generations, giving them a longer runway to compound wealth.
This early-start phenomenon may be partly driven by structural headwinds. A softer job market for recent graduates and the unaffordability of first homes—U.S. price growth slowed to just 0.7% in the latest reading—are pushing young adults to turn to equities as a primary wealth-building tool, Levine suggested. The housing affordability crisis is a key factor in this shift.
BNY Wealth, which oversees roughly $300 billion in assets, is adapting its offerings to capture this demographic shift. “We've rounded out our offerings in a way that we can appeal to the client who's interested in aggressive growth in a way that speaks to them, while also preserving the fully diversified portfolios,” Levine said. The firm is adding new asset classes and solutions to its core value proposition of fully diversified portfolios.
Advisors should take note: the risk tolerance of younger clients may not follow the traditional arc of increasing risk aversion with age. Surveys reveal a generational divide in retirement planning, and advisors are being urged to broaden their focus to accommodate these differences. Meanwhile, a Morgan Stanley survey found 55% of retail investors remain bullish despite rising geopolitical and inflation risks, a sentiment that aligns with Levine’s observations.
“If I had to project, I suspect that the 30-year-old of today or the 35-year-old today may be more risk accepting as they move forward in their lives,” Levine said. For wealth managers, that could mean a sustained demand for growth-oriented strategies—and a need to balance that with the discipline of diversification.
