A Wall Street CIO who oversees $235 billion explains how millennial investors are different from their parents - and reveals what that could mean for the future

CNBC

• Omar Aguilar, the chief investment officer for equities and multi-asset strategies at Charles Schwab, told Business Insider how baby boomers and millennials differ in their approaches to investing.
• Aguilar is responsible for $235 billion in assets at Schwab, and he spends a lot of time examining the attitudes and biases of investors to help them make good decision.
• Visit Business Insider's homepage for more stories.

The concept of FOMO, or "fear of missing out," is mostly associated with millennials who Instagram their avocado toast at brunch. But investment pro Omar Aguilar says it best describes another group: baby boomer investors.

Aguilar is the chief investment officer for equities and multi-asset strategies at Charles Schwab Investment Management, where he's responsible for $235 billion in assets. And one of the key parts of his job is understanding the needs and psychology of different groups of investors.

He told Business Insider that those groups often fall along generational lines, and he evaluates them using investing and trading data, public surveys and other sources. That helps him watch out for harmful tendencies and biases and helps him tailor his approach to different clients.

"You cannot take the same approach across all generations," he told Business Insider. "There's a lot of stuff that we do to try to connect the dots."

Millennials - who are in their 20s and 30s - are now the largest generation in the US, and they're often associated with the deaths of numerous trends and industries. But Aguilar says they're also a financially smart group overall.

"Millennials tend to be more conservative in nature despite their young age," he said. "They tend to be more concerned about market volatility and they tend to be bigger savers."

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That could leave them in a good position for retirement decades from now, but Aguilar notes that there's a downside: Because they're cautious and hold on to bad experiences, millennials are reluctant to get back into the market after turbulent times like the downturn at the end of 2018.

That means many of them could have missed out on this year's market rally. Aguilar said their parents' generation probably doesn't have that problem.

"Boomers, by contrast, are competitive and get over things very quickly," he said. "By now, they've forgotten about it and they're ready to go back in."

If it sounds like both groups were shaped by their experiences, Aguilar agrees. He says the early careers of many millennials began around the time of the Great Recession and sluggish growth that followed, leading them to be cautious with the savings they have. Boomers have benefited from several stretches of huge economic or market growth.

"If you look at the S&P performance from the time that the average baby boomer was in high school through the time they were in the process of retirement … it is amazing," he said.

That's encouraged boomers in general to take chances on the market. And where millennials might be slow moving and deliberate, Aguilar says the market success boomers have enjoyed has made them willing to take some huge risks that can fail dramatically.

"The baby boom generation tends to be caught in the mix of a lot of the asset bubbles," he said. "Fear of missing out is a very typical pitfall of being in that generation."

As for the Schwab CIO himself? He falls in the middle. While many members of Generation X are going through notable financial struggles, he shows some possible pride in his cohort as he describes how well they stick to their plans.

"Generation X is a generation that tends to be incredibly disciplined for investing," he said. "They're almost like the perfect client."