Boomer Bust In Stocks? What Drugs Are You Taking?

Could baby boomers, whose pervasive influence radically changed politics, culture and other aspects of American life, inflict the same kind of havoc on Wall Street?

For years, some market pundits have worried about what would happen if aging baby boomers, one-time advocates of making love not war and impeaching Tricky Dickie, decided that owning stock is riskier than dropping a tab of LSD copped from an OD'd Grateful Dead groupie. What if retirement to boomers means turning on, tuning in and dropping out of the stock market?

One of those to raise the specter most recently is Hong Liu, who teaches finance at Washington University in St. Louis.

"When millions of baby boomers follow that pattern in a concentrated period of time, the impact on the stock market could be formidable," Mr. Liu warns.

Boomers have a well-deserved reputation for rattling the Establishment. But many market mavens aren't fazed by prospects of a mass boomer exodus from the market. They say demographics and time should blunt the impact of asset allocation decisions made by aging boomers.

"The shift will likely occur much more gradually than traditionally thought," says Stuart Ritter, a certified financial planner with T. Rowe Price in Baltimore.

Baby boomers, born between 1946 and 1964, won't all retire at once, but over a period of 20 years or more, he says. Moreover, most of them can expect to live 20 or more years after they retire. Discounting the notion that they don't want to die before they get old, their retirement savings will have to keep growing for them to afford an extended retirement. That means relying to some extent on stocks.

"You need to be in assets that give you higher, long-term rates of return, which means equities," says Malcolm Polley, chief investment officer for S&T Wealth Management Group in Indiana, Pa.

The notion that retirees should load up on bonds is "the goofiest thing I've heard," Mr. Polley adds.

•	Boomer Bust In Stocks? What Drugs Are You Taking? Pittsburgh Post-Gazette, Sunday, June 25, 2006 Byline: Len Boselovic