New data out today shows retirees are putting more of their assets into stocks: 67% of new contributions going to stocks vs. 56% low in March 2009.
What’s the point? Traditional market analysis holds that individual investors tend to be late in reacting to market trends, i.e. selling at the bottom, buying near the top. While the rising contributions data is a bit of a concern, as of now, we don’t believe there is enough “euphoria” among the general public that would signal an end of the bull market or a major cyclical top in the market, although we would not be surprised to see a market correction sometime this year. We advocate diversified portfolios as a way of reducing portfolio volatility.
Link: http://money.msn.com/investing/post--retirement-investors-piling-into-stocks