Saving for the retirement may not seem like an urgent task if your golden years are far in the future. But the sooner you start investing, the better, because your money will have more time to work for you and potentially grow.

Over time, investment planning will become distorted as one asset class outperforms others. Periodic re-balancing maintains the original risk-reward target for the plan.

Your advisor will discuss with you any proposed changes before executing them. Will your equities suffer when the baby boom generation decides to retire? Many financial experts agree that the boomers, aggressively saving for retirement, are partly responsible for the surge in equity investments over the last several years.

And some doomsayers are predicting the boomers will drain the equity markets of their capital once they retire. Are your equity portfolios at risk? As baby boomers near retirement, they will undoubtedly shift strategies, transitioning from the accumulation phase and into the capital preservation phase of their lives. I do not discount the rationale that as boomers retire, there will be some divestment from the stock market.

In fact, it is expected, and sound for retirees to shift a portion of their investments from stocks to fixed income for capital preservation. Numerous studies have been conducted on retiree distribution rates, all of which indicate that a healthy allocation to a diversified portfolio stocks is essential for ensuring the retiree does not outlive his cash.

Therefore, all of these factors combined imply that the boomers will continue to own a substantial amount of equities during retirement. Furthermore, who is to say that boomers are not already allocated to some degree in fixed income instruments? The assumption of the doomsayers is that boomers have little or no exposure to fixed income currently, thus creating a monumental shift from equities when the work years end.

Will retiring baby boomers spark a stock market bust? - CBS News

Many boomers have already begun the process of shifting some of their equities to bonds. Perhaps the greatest fallacy in the argument that boomers will induce a stock market collapse is the idea that there will be a mass exodus of stock investors during a short time frame. This is a flawed presumption on two levels.

One, the span of time between the oldest boomer and the youngest boomer is eighteen years. So, assuming all the boomers retired at age 65, that would have the first boomers retiring in and the last of the boomers retiring in , hardly a short term.

Second, the argument neglects to account for the mass migration into the stock market during the same period of time. From to there were million babies born, roughly 4 million a year. Assume again that all individuals will retire at age Census Bureau expects the domestic population to grow from to million in the next 50 years.

Finally, we cannot ignore the impact of immigration and foreign investment.

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