A point made by someone on another board - Baby boomers are at the age where they can't risk capital losses and having experienced or seen what happened in 99-2001 they could liquidate their 401k stocks en masse. Any thoughts
Too huge of a variance in choices amongst companies (i.e., stock selection, company stocks, mutual funds, bonds, etc.) to get a real feel. My company has only mutual funds (~8 equity, one bond fund) and one money market as choices. I'm 100% in the money market as of beginning of November. My personal experience with my co-workers: they haven't a clue about what is going on in the economy and they rely on our 401K intermediary advisor for advice. But boy, ask my coworkers about the latest contestants on American Idol and they will freely share their opinion.
You don't think they remember 2000? And now more and more boomers are retiring out of the country. Many can not take a falling dollar. Some likely going to gold.
For those the learn from the school-of-hard-knocks, it depends on how far back the brain-cells go, 2000, 1987, 1970-something. They're probably loading up on treasuries by now...
Just go ahead and buy when you see value as discussed by yourself on another thread . Having been through this more than once before I have heard the premature value argument before and will buy when I see value, which may be a lot lower than your point of entry, and a lot later, maybe 2-3 years or so later. In the meantime I will raise more cash for this through shorting. Fact is most of the public don't even think there is a problem yet. I note that the directly affected homebuilders such as BZH are at near bankruptcy levels and the buyout premium has been completely wrung out e.g. CHTR. also, I am not saying that there are no wild cards out there like money[liquidity created] finding its way into the market as an inflation hedge. P.S. Is Buffet buying companies yet?
Speaking as a boomer (born 1957) I saw the volatility start in July (sittin in the airport in Denver) and put 5 IRA accounts into cash -- for exactly this type of reasoning been in cash ever since I have decided I can keep the money in cash, avoid the vagaries of market swings --- and daytrade to meet 1-2% a month on the portfolio balance so - my vote (and its only one vote) is ---- yes there is a reason to be in cash as for the other 97 bazilllion boomers - who knows?
...actually yes he is. he has been adding to his BNI stake which is at about $4 billion now. he bought a reinsurance unit from ING for about $450 million. and he bought 60% of marmon holdings for $4.5 billion and will pay for the rest over the next 4-5 years...so that is about $7.5 billion total for the company. so yes he has made some significant acquisitions lately.
I'd imagine most baby boomers should have a portfolio that is less than 35% stock anyway. I always thought the idea was to put 1% in cash/bonds for every year of age so I'd think a baby boomer at age 65 would be in 65% cash/bonds anyway so this drop in the market shouldn't hurt horribly. Even if they liquidate shouldn't be too bad...... ...of course this is assuming that most baby boomers actually adjust their portfolio at least once a year to see what they're invested in....