Another example of faulty statistics...
Money magazine has an article on risk tolerance this month (very good article despite what I'm about to say). One little sidebar gives 2 stats: 42% of 401k accounts have 80% or more in stocks; 4% of investors have the risk tolerance to tolerate a portfolio of 80% stocks. The implication is that lots of people must be investing way beyond their risk tolerance.
Why is that a faulty assumption? For the reasons I gave above. Lots of people have assets beyond their 401k accounts. As I said, my wife has 100% stock in her 401k. I would agree that a 100% stock allocation is nuts, but that isn't her only retirement account by far. In fact, it is a small minority of her retirement savings, so her overall allocation is nowhere near 100% stock.
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Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
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