Why Are Young People Taking So Many Unwise Financial Risks?

There are at least two conflicting narratives about Gen Z and young millennials. One is that they are extremely risk averse — afraid even to go out of the house, much less on a date. Another is that they are extremely risk inclined — always betting on sports or speculating on exotic assets.

Both of these theories can be true. In fact, they may be equally rational responses to a concern that the world is changing and the old rules don’t apply. But they both require an understanding of risk that very few investors, much less young people, possess.