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They’re investing just 44 percent in financial markets – down from 76 percent in 2007. More One Percenters say the stock market is “a real risk” rather than a “real opportunity.” That’s a big switch from just last year, when 62 percent said the market was an opportunity. In other words, One Percenters used to save less, and invest more. Now they’re “basically stuffing money under the mattress,” said Jim Taylor, vice chairman of Harrison Group.
That also means they’re spending less – on everything from traditional luxury to second homes. Fully 82 percent said they would spend more if they had more confidence in the future.
“This has resulted in people managing their risk to a ‘no loss’ position rather a ‘real gains’ position,” Taylor said. “That’s not the great tradition of American investing.”
Do you follow CNBC.com at all? Especially the high net worth section? Wealthy boomers are becoming as risk adverse as their less affluent counterparts. You are a perfect example. How much are you weighted in equities. You told me but I won't share PM information. The title of this thread is Fidelity Insight and as we both know they have designated the Income/Preservation portfolio as all income funds based on customer request. I am not talking at all about them selling but what they are holding. High Net Worth - CNBC
Any disagreement should be directed at the authors of this and other articles on the topic. This is from August 8, 2012 which makes it current.
exactly my same point. we read article after article about the baby boomers selling out and destroying the markets or the economy but the reality is most baby boomers already made their changes.
they make it seem like baby boomers will wake up and go im 62 or im 65 today,lets sell everything.
most individuals are so risk adverse whether they are boomers or not that they are already at record low allocations for the last decade.
one of the resons i think we are headed for a bit of deflation is we arent spending or borrowing to spend.
the feds powerless with rates at zero.if we arent spending we arent spending and thats true of every age.
the reality is we are living the damages of all off us, not just the boomers.
what most articles fail to recognize is if any boomer has money and he isnt investing it or spending it ,well boomers are dying . the biggest death group is in the 50's to 60's time frame.
that boomer money is being passed to the boomer kids who can then run with the torch .
the kids will be more inclined to spend and invest their new found wealth so eventually things will cycle around with that money back in play as either an investment in something or buying good and services
right now all age brackets are hunkering down and staying on the sidelines as far as spending or taking on more risk,
Last edited by mathjak107; 08-13-2012 at 03:54 AM..
exactly my same point. we read article after article about the baby boomers selling out and destroying the markets or the economy but the reality is most baby boomers already made their changes.
they make it seem like baby boomers will wake up and go im 62 or im 65 today,lets sell everything.
most individuals are so risk adverse whether they are boomers or not that they are already at record low allocations for the last decade.
one of the resons i think we are headed for a bit of deflation is we arent spending or borrowing to spend.
the feds powerless with rates at zero.if we arent spending we arent spending and thats true of every age.
the reality is we are living the damages of all off us, not just the boomers.
what most articles fail to recognize is if any boomer has money and he isnt investing it or spending it ,well boomers are dying . the biggest death group is in the 50's to 60's time frame.
that boomer money is being passed to the boomer kids who can then run with the torch .
the kids will be more inclined to spend and invest their new found wealth so eventually things will cycle around with that money back in play as either an investment in something or buying good and services
right now all age brackets are hunkering down and staying on the sidelines as far as spending or taking on more risk,
No one said it was an overnight thing but a cumulative thing over time and increasing as more people age. The research is there that after age 60ish humans become more risk adverse in their endeavors and not just financial ones. As you have a more aging population because of the Boomer demographics you have a greater percentage of the population that is risk adverse impacting the equity markets in an increasing fashion. The recent market events of flash crashes etc etc just might not help. I wonder if a couple in their their 60's or perhaps any age going to an amusement park and seeing multiple high speed event accidents and serious casualties just might not decide to go on certain rides. I am not talking history but the impact of events on the human psyche coupled with normal developmental behavior. We are talking about humans remember. Again yes it has been talked about for years and hey we are now in that time period where folks wondered if it might begin. I think you would agree the market data and resulting articles would agree that folks are hunkering down. So now the question is why! Sorta like climate change. Whether you believe it is natural or man made sorta hard not to think something is happening. Yes it has been predicted by some for years and not by others but something is happening whether natural or man made. So it is up to the individual to decide why and how they want to react. Remember we are humans and if we can have irrational exuberance can't we have the opposite? Again aren't you under 20% yourself in equities? Is that your age profile or just a temporary hunkering down? Do you plan at some point to increase your exposure? Again agree or disagree but it is a topic out there for folks to react or not react to and sometimes self fulling predictions do happen regardless of the reason why.
my allocations arent an age thing as much as a goal thing. if i wasnt able to meet the income i wanted or needed then if my risk tolerance was such i would be running much higher equity allocations
if at some point if cant meet the income i want then yes my allocations will go up to a point where im still comfortable with the risk.
my allocations arent an age thing as much as a goal thing. if i wasnt able to meet the income i wanted or needed then if my risk tolerance was such i would be running much higher equity allocations
if at some point if cant meet the income i want then yes my allocations will go up to a point where im still comfortable with the risk.
And that is exactly what the article and others are saying folks are doing. Circling the wagons around what they have as it is good enough and why that the RISK to get more. You are exactly what is happening and was thought might happen. Now whether the two are connected or not only time will tell.
“This has resulted in people managing their risk to a ‘no loss’ position rather a ‘real gains’ position,” Taylor said. “That’s not the great tradition of American investing.”
One respondent in the study said “My savings rate has gone up and I’m not spending, which I realize is bad for the economy ... but I like having a wide moat around me so that nothing can bother me.”
Say it is so my friend your risk tolerance isn't what it use to be and that isn't good for equity markets moving forward.
oh for sure i agree with you but i dont single out any age group. thats right across the board.
as i said in other postings volatility has changed for all since 2000. the old 60/40 mix now is running 3x the swings it did for the 60 years prior. that volatility in all age groups and mixes has changed the landscape of investing at least for now.
so much money has flowed out of equities that if your a contrarian thats a bullish future sign.
im predicting for the next year or 2 at the least zero coupon 30 year treasuries could be the big winner. a 1% drop and thats a 30% gain.
Last edited by mathjak107; 08-13-2012 at 10:33 AM..
oh for sure i agree with you but i dont single out any age group. thats right across the board.
as i said in other postings volatility has changed for all since 2000. the old 60/40 mix now is running 3x the swings it did for the 60 years prior. that volatility in all age groups and mixes has changed the landscape of investing at least for now.
so much money has flowed out of equities that if your a contrarian thats a bullish future sign.
im predicting for the next year or 2 at the least zero coupon 30 year treasuries could be the big winner. a 1% drop and thats a 30% gain.
The irony of it is that discussions last week were about money coming out of the bond market and other fixed incomes etc etc. Commentators were in part saying that was good as they would be putting that money to work in equities soon. Some folks just said nothing with funny looks on their mouth because previous discussions were like my link that folks were just sitting on cash. As you have said a few times the bond market is a bubble waiting to claim casualties and moat building loves cash. Could be interesting the next few months. Wonder what currency that cash is in.
i along with robert keller see long term treasuries being the place to be for a while. not so much on intermediate term like the 10 year as those yields are pretty low or corporates as those behave more like stocks. the 30 year can easily move a point down. i will say this,equities are ripe for a melt up but it will be short lived.
this is the 3rd time in history that the yield on the s&p 500 is higher than the yield on the 10 year treasury. both other times saw explosive moves upward.
i think while the media and talking heads focus on the com9ing inflation they are missing the present deflation thats quietly unfolding right now.
i along with robert keller see long term treasuries being the place to be for a while. not so much on intermediate term like the 10 year as those yields are pretty low or corporates as those behave more like stocks. the 30 year can easily move a point down. i will say this,equities are ripe for a melt up but it will be short lived.
this is the 3rd time in history that the yield on the s&p 500 is higher than the yield on the 10 year treasury. both other times saw explosive moves upward.
i think while the media and talking heads focus on the com9ing inflation they are missing the present deflation thats quietly unfolding right now.
I will only say that I have close to a Masters Degree in Economic Education and Applied Behavioral Sciences. I have masters plus a a bunch over. I have followed the University of Chicago Economics Department which is a leading Behavior Economics center. In short I hear what you are saying and don't disagree but when it comes to the human behavior side of it we are in new territory.
thats why i feel all those retirement calculators that folks use may be yesterdays news.
its been a new normal. non the less if you look around you we all see the same ugly things.
some of us see inflation on the near term horizon. others like myself see deflation in the near time but with a big rise short term in the markets and then a drop.
both sides can be right. i would never argue an opposing view as these are only future economics as we each see it .
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