Older investors’ new faith in equities will be tested. Plus, asset allocation ETFs get even cheaper

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Older investors’ new faith in equities will be tested. Plus, asset allocation ETFs get even cheaper
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Wells Fargo global investment strategist Douglas Beath is pointing to two recent studies showing that older investors have drastically increased their portfolio weightings in equities over the past 12 years. He thinks this may be a mistake.

Relative returns are one of the biggest reasons for the trend. From 1980 to July 2023, the S&P 500 generated an average annual return of 11.8 per cent compared with the Bloomberg U.S. Aggregate Bond Index’s 6.7 per cent. The success of buy-the-dip strategies in stocks have also made the asset class more popular.

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