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Are Boomers Too Cautious About Stocks?

Posted By Barry Ritholtz On February 25, 2013 @ 12:00 pm In Digital Media,Investing,Psychology | Comments Disabled


Source: Squared Away Blog [2]


The Financial Security Project [2] (of Boston College) references the ongoing risk aversion that many investors still seem to laboring under.

They note:

Mutual fund investors poured some $17 billion into domestic equity funds in January, reversing 2012’s trend, according to the Investment Company Institute (ICI), an industry trade group.

But it’s too early to declare that fund investors have fully recovered from the 2008 market collapse, even as the bullish S&P500 stock market index [3] flirts with its 1,565 all-time high reached on October 9, 2007.

This is something we see in the office all the time, and it is classified as a financial behavioral issue: Boomers have not not gotten back into equities, as they age they continually pare back their risk profiles.

I am not sure what the solution to the behavioral issue will be, but I suspect a lot of people who previously thought of themselves as “comfortable” might be in danger of outliving their monies.

These are strange days . . .

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URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/02/caution.jpg

[2] Squared Away Blog: http://fsp.bc.edu/boomers-still-cautious-about-stocks/

[3] index: http://finance.yahoo.com/echarts?s=%5egspc+interactive#symbol=%5Egspc;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

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