WHEN I went to work in Wall Street in 1972, it was an article of faith that older investors should own less common stock than younger ones. One rule of thumb suggested that your equity exposure should equal 100 per cent minus your age: 70 per cent for a 30-year-old, for example, but just 35 per cent for someone who is 65.
Since then, investment practices have evolved considerably, but on the question of how much common stock to own - the single most important question governing investment returns - not much has changed.
Typical recommendations nowadays propose greater equity exposure than they did 40 years ago, but it is still the overwhelming view among investment counsellors that people should...
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