Young Ones, Go Forth and Speculate

Every day I read personal finance articles with bad advice that is recycled endlessly. Ordinarily I keep my mouth shut about them, but recently Jonathan Clements over at The Wall Street Journal devoted one of his columns to advice for people in their 20s, and that's my turf. You can read it here if you have a subscription and a pillow handy for the cat-nap it will likely induce.

I started foaming at the mouth when Clements suggested that investors in their 20s should put 60% of their money in stocks and 40% in bonds. I got a tic in my right eye when he pooh-poohed the idea of investing heavily in growth stocks while you're young, and I had to spend 15 minutes punching a pillow while I calmed down. This is exactly the kind of one-size-fits-all advice that might make sense for a 50-year-old, but doesn't do squat for anyone under 30.

Those of you who read my earlier columns might be surprised that I'm taking any kind of position on investing. I believe that saving money is at best nonessential for the under-30 cohort, and that people my age will generally get more from spending their money than from buying stocks or bonds. That said, there's a right way to invest in your 20s, and there's a wrong way to invest in your 20s. Clements is firmly in the wrong-way camp.