Participant Asset Allocation Trends: Target Date and Lifestyle Funds states that their investment approach hasn’t really changed compared to a few years ago. Twenty-four percent (24%) have become more aggressive, while 17% have become more conservative.  

Surprisingly, “older age” is the reason most often cited for becoming more aggressive; this reason is given by 50% of the participants surveyed. What’s even more surprising is that participants in the 35-49 age bracket are statistically similar to those that are age 50 and over (57% vs. 60%, respectively). Older investors may feel compelled to take additional risks in order to reach their financial goals. Overall, 47% attribute becoming more aggressive to increased knowledge about investing. This is especially evident in participants under age 35. Fifty eight percent (58%) of this group switched gears due to increased knowledge.

Ironically, not only is older age the top reason for aggressive participants, it’s also the top reason for conservative participants. Sixty nine percent (69%) of those surveyed state that they are getting more conservative because they are getting older age. As one might expect, the proportion of investors that are more conservative increases as age increases. Education plays a relatively large role. As we observed on the previous page, increased education is associated with increased risks. Conversely, education can also persuade participants to reduce their level of risk. Overall, 15% reduced their risk as a result of additional insight.

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