March 23, 2012
A recent Consumer Reports found higher returns among self-described “aggressive” investors compared to those who describe themselves as “conservative.”
In a survey of 21,714 readers between the ages of 55 and 75 (“Avoid costly retirement mistakes”), the March 2012 edition of the magazine advised against “investing too conservatively.” It reported that survey respondents with an overall “conservative” investment style “reported median savings of $478,000,” while those who were “aggressive” reported savings of “$617,000.” Respondents who were “moderate risk takers,” according to the magazine, had a median savings of $563,000.
While the article did not define “aggressive” versus “conservative” investing styles, it implied that those with a diversified mix of investments that included a “reasonable exposure” to stocks and stock funds had a higher net worth than those who shunned these investments.
Interestingly, the survey also found that those with a mix of different types of investments – 401(k) [or TSP accounts for feds/military], their homes, IRAs, savings accounts, stocks, bonds, mutual funds, etc. – were more likely to have a higher reported median savings than those with fewer accounts.
The lesson seems to be clear: invest not only in a diversified mix of stocks and bonds, but also in different types of investment vehicles to build greater wealth over the long term.