by Ernesto R. Martin

As mentioned, the old rule of thumb was that stocks make more sense for younger people, but those at or nearing retirement should instead own bonds instead of stocks. The reason is volatility, namely that the price can swing, sometimes drastically. So money you might need in 3 or 5 years should not go into stocks. This old rule is no longer true. Older folks who have a kitty of funds that they won’t need for 10 years and a reliable income stream should have some of their money in stocks.