This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Over 50? Here's Why You May Still Be Leery of Stocks

NEW YORK ( -- A recent survey by BlackRock observes that only 18% of respondents' investable assets are currently deployed in stocks. For those investors, cash, at 48% of financial assets, remains the largest holding.

That many individual investors remain "underexposed" to equities is sometimes cited as a heartening sign. The bull market, notwithstanding its nearly five-year-long duration, doesn't appear to have "bubble-like" dimensions, based on certain measures of investor participation.

Some of this "equity-light" allocation behavior reflects the preferences of older investors, who own a disproportionate share of U.S. stock market wealth. In fact, those born before 1965 account for 32% of the population, but represent 68% of all stock and bond investors.

So why does the 50-plus crowd remain skittish about owning stocks, five years after the 2008 financial crisis, and in the immediate wake of a cheer-worthy 28% year-to-date gain in the SPDR S&P 500 (SPY)? Are the fears of older investors more readily aroused by memories of the financial crisis and bear market?

The most obvious explanation for the risk aversion of older individuals is that they're closer to retirement age, and therefore reluctant to retain a high exposure to equities. Should another market meltdown occur, those in, or approaching, retirement would have less time to recover their losses.

However, there may be another factor at play. For older investors, memories of the 2008 financial crisis may loom larger, partly because they "feel" like they occurred relatively recently, compared to the perceptions of younger adults.

There are reasons for this disparity in time perception. Apparently, perceived time moves faster as individuals grow older. For someone over age fifty, the events of four or five years ago "feel" more recent than might be the case for someone in their 20s.

This phenomenon is known as "time compression." According to a recent academic paper, "a person's perceived duration of an interval understates its true duration, so for example, one calendar year may seem to pass in just a few months. A commonly expressed feature of time compression is that it tends to worsen with age; life speeds up as you get older."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%
YHOO $27.97 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs