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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Joan Osland Graffius who wrote (603)6/24/2000 2:35:00 PM
From: UnBelievable  Read Replies (1) of 436258
 
I Was Being Sarcastic, Unfortunately There Is Some Truth To It

The invest and hold approach (equities outperform other assets in the long term) has been drummed into the head of most people by now, and further reinforced by growth fund performance over the last few years.

The problem is for a significant portion of workers today (the baby boom generation), while they may not realize it, they are no longer investing for the long term.

There are a number of quite possible economic scenarios where people who plan on retiring in the next 10-15 years will not have nearly the amount they could have by moving 401(K) money into Money Market or Synthetic GIC's if available, than they will leaving there money in stock funds.

There is nothing in recent experience that would leave most people to realize or believe this. I would imagine that it will not until they have seen there investment substantially eroded will they think about changing. With substantially eroded for most being somewhere near the bottom.

The "lack of wealth" effect will be further exacerbated because companies have substantially moved retirement benefits out of Defined Benefit Pension plans, where the employers assumes the investment risk, to Defined Contribution 401(K) plans where this risks falls on the individual employee.
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