Gen Z Is Overhauling Portfolios Ahead of the Midterms

Nearly three-quarters of Gen Z investors have reshuffled their portfolios — or are seriously considering it — ahead of the Midterms on November 3, according to a new survey from the Nationwide Retirement Institute.

The finding, reported by Bloomberg on October 20, comes as the country faces both a political and a financial cliff edge: Republicans currently control the White House and both chambers of Congress, and polls suggest Democrats could take the House — and possibly the Senate — in less than three weeks.

Anxiety is driving the trades

The survey, run by Harris Poll from late August to mid-September, covered more than two thousand individual investors holding at least ten thousand dollars in investable assets, plus five hundred financial professionals. About four in ten investors across all age groups said they had made changes, but Gen Z investors were acting at more than four times the rate of baby boomers — fewer than one in five of whom had made or even considered a move.

Nearly a quarter of Gen Z respondents said they had shifted money into more conservative or lower-risk investments ahead of the vote, compared with roughly one in eight boomers. Younger investors were also far more likely to diversify into new asset classes or to talk to a financial adviser about election-related risks.

The backdrop is unease. More than half of respondents said the Midterms were making them more anxious, and roughly three in four said the outcome could meaningfully affect their long-term financial plans. The economy tops the list of voter concerns — more than eight in ten call it very important to their vote, according to the Pew Research Center — while consumer confidence has sunk to its lowest point since 2014, weighed down by stubborn inflation in healthcare and fuel costs.

Experience explains the generation gap

Mark Hackett, chief market strategist at Nationwide's investment management arm, said the generational split surprised him. Boomers survived the dot-com bust and the global financial crisis and learned that markets eventually bounce back, he said. Younger investors came of age after those crashes, marinated in a nonstop feed of market commentary on social media, and never internalized the same lesson.

"It feels lousy, but the market is much more resilient than people give it credit for," Hackett said, according to Bloomberg. The record supports him: the S&P 500 has ended the twelve months following every midterm election since 1950 in the green, regardless of which party won, averaging a gain of about fifteen percent — comfortably above the index's long-run average of just over ten percent a year. And history even smiles on divided government: an analysis by brokerage firm LPL Financial, covering more than seven decades of elections through 2023, found stocks returned nearly fourteen percent on average in years with a Republican president and a split Congress — one plausible outcome this November.

Advisers mostly say: do nothing

Among the advisers and financial professionals surveyed, nearly two thirds said the best course of action in an election year was to do nothing at all. Some changes are defensible housekeeping: Jason Lilly, founder of Tenere Wealth Advisors in Massachusetts, told Bloomberg he has been selling stock for clients who will need cash for living expenses or mandatory withdrawals from tax-deferred accounts. Beyond that, his advice is to sit tight through what he expects to be a "stormy" stretch around election day. "I wouldn't make major changes," he said.

Wes Crill, a vice president at fund giant Dimensional Fund Advisors, framed the long view: "No matter who was in the White House or Congress, the long-term returns have been positive."

The warning carries weight because emotional timing has a price. Advisers and strategists told Bloomberg that anxiety-driven moves can leave young investors out of long-term gains — an expensive mistake in a market that just posted its worst week since June.

There is also a quieter signal in the data. Gen Z investors were unusually likely to seek a human adviser for election-related worries, a preference that matches the latest VISTA investor survey, which found trust in AI-only financial advice has slipped to just one in ten investors, according to FinanceFeeds. For a generation that trades on its phones, high-stakes uncertainty still calls for a human. That same dynamic showed up in Canadian research finding that fear of the future — not just living costs — is driving Gen Z to pull back from retirement savings, while other young savers stockpile cash ahead of fiscal decisions and consolidate old retirement accounts early.

The timeline matters. The Nationwide poll ran before the market's recent slide and before the final stretch of campaign advertising; if anxiety was already this high in September, the final fortnight could push even more young investors to trade. With the election thirteen days away, the choice facing Gen Z is between reacting to headlines and trusting the market's long habit of recovering after votes are counted.