A recent Wells Fargo study found that 52 percent of those in the 22-to-32 year-old age range are afraid of the Stock Market. Allianz, the German Financial Giant, has also reported that, among 25-to-44 year olds, there is a preference for safety and peace-of-mind.  For perspective, just think of all those Senior Citizens who are now trying to live on the income from CDs these days.  A few weeks ago, a Private Banker at a Major Bank, told me that five-year CDs were only yielding 0.55%.  Get real, kids!

The Stock Market reflects the overall Economy.  When the Economy does better, corporations generally follow suit.  And, as we have seen during the Great Recession (late 2007-to-early 2009), an improving–if not exactly vibrant--Economy bodes well for the Stock Market.  Besides, Younger People have much longer life expectancies, and a a longer period of time to overcome Inflation–by maintaining their purchasing power

The key idea in any sort of investment–whether a house, fine art, stocks or bonds–is to buy low, and sell high.  Unfortunately, many investors don’t really try to understand the Markets.  They should realize that there WILL (for sure) be fluctuations in the Markets.  People in their 20s, 30s and 40s–especially those contributing monthly to a company-sponsored plan–should invest for growth.  In times of uncertainty, they can make more conservative investments and, then, shift back more aggressively, when things recover.

Contributing on a regular basis means that your monthly contribution buy more shares (or units) when the Market is down. Also, when you are younger, it makes sense to be more aggressive and, then, gradually shift to a more conservative strategy as you approach Retirement.  But, unlike those approaching Retirement, younger investors are generally still investing and working.  So, they can always earn (work and investments) their money back.  Older workers need to maintain what they have, at least to a certain extent; but, they will still need, at least, some Growth in the portfolio.

NOTE: The Inflation Landscape changes after you retire.  That’s because, as you get into your 60s, the Health Care Component of your Cost of Living increases.  That is why Retirees balk at having Social Security increases (COLAs) tied to the CPI, which does not adequately reflect their Health Care expenses.



  1. Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: