A Risk-Averse Generation

Many people are now asking what they should invest in or if they should invest at all during this economic recession? I found an interesting article in the New York Times, that comments on how the generation of investors in their 20's and 30's are becoming risk-averse or "shy investors" investing only in low risk, low return investments. People have always been taught to have a well-diversified portfolio and then you will have high, consistent returns, but due to the recent meltdown, many investors houses' equities and investment portfolios have gone down and their college degrees are not protecting them from unemployment. Also the possibility of unemployment and inconsistent cash flows makes risky investments less desirable. People are now considering less risky investments even though it means a lower return and a smaller retirement RV.

I think people should should still invest, but they should make wise decisions when doing so. Firstly, people should pay off high interest debt such as credit card debt and student loans, which in turn will free up some money for investments. Secondly, they should consider the reliability of the employment, such as a tenured professor has great job security and could invest more in equities. However, someone working in the stock market has less job security and should consider less risky investments. Whatever you decide to invest in, make sure you invest in something below your limit, something that you can easily afford.

Invest wisely...