Most financial experts believe that many older Americans are too heavily invested in the stock market, and now there’s evidence to back them up. When giant Fidelity Investments analyzed its retirement account customers, it found that 37% of those born between 1946 and 1964 (so-called Baby Boomers) have more equity holdings than they should. Depending on age, people in this age bracket should have from 47% to 67% in equities, according to Fidelity.
While it takes individual tailoring to achieve the right asset allocation, having too much in stocks is risky for older people, who don’t have as much time on their side to recover from market downturns. Furthermore, retirees who need money may be forced to sell equities during downturns. Excessive amounts in stocks can cause worry.
