Below is an excerpt from a new Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

Fidelity Warns Boomers: Lay Off The Stocks - 40390415410 4933f04732 b

Fidelity’s Q3 2019 retirement report contained a warning for Boomers: Lay off the stocks. Over the past 10 years, this generation has increasingly exceeded the recommended allocation for stocks for people in their age group; a full 8% have their entire portfolio invested in equities. (Fidelity Investments)

NH: There is plenty of good news in Fidelity's 2019 audit of its 30 million retirement accounts. Average defined contribution savings rates (employer plus employee) have been rising strongly in recent years.

Participation rates are also rising strongly, especially among Millennials, thanks to auto-enrollment. And a rising share of savers are making a reasonable portfolio allocation between stocks and bonds. (Target-date funds are helpful here.)

The main exception, however, is Boomers, who continue to favor odd portfolio mixes. 

Some 5% of Boomers have zero exposure to equities in their 401-k's. And an estimated 38% are over-invested in equities (8% are 100% into equities) relative to what most investment advisers recommend for their current phase of life.

Taking more personal risks has been a lifelong peer personality trait for Boomers--just as taking fewer personal risks is coming to be a cardinal trait of Millennials.

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.