RISKY STOCKS FOR BOOMERS
When it comes to investments, millennials and baby boomers have their differences and similarities. In the case of former, they tend to choose companies that are part of their daily activities while the latter who are more in need of an income to supplement their retirement accounts, tend to take some time to recover from market turmoils.
According to research, the way these two groups establish their portfolios are highly in contrast but are also similar in certain aspects. For example, both generations love Apple. Youngsters are drawn to it because of its vision and gadgets, while the older ones find its prevailing success and stability as appealing. Meanwhile, there are stocks as well that appear on the young one’s list of preference but are not found on the boomer’s.
This social media site is one of the well-loved sectors of investors, and even accounted for 2.6% of the initial stock trades last year. Unfortunately, it is plagued with several risks, especially for aging individuals. It has an extremely high valuation which is not backed by fundamentals, and has chances of ending up the way Microsoft once did. The technology company had the same steep value of $59 per share back in the day, but those who purchased its stock and held onto it have been broken at best.
Excessive value poses giant risk scenarios as well, despite the notion that it indicates a bullish outlook for a firm, mainly because investors will be faced with either an ending of the business’ earnings rising to support its stock price, or the market sticks to valuing it at a level not in accordance with its profit. This is especially sketchy since a report says that utilization of the site has been declining plus it pays no dividend which could be unfavorable for the population category.
Bank of America blemish
Meanwhile, this blue-chip financial institution has been a favorite as well because of its present earning and balance. It has proven its strength and ability to rebound after several economic storms. Aside from this, the bank also pays a fixed dividend and was able to wriggle its way out of a recession.
Despite this, its performance still lags compared to its peers such as JPMorgan, with a yield of only half of its competitor. It also requires government clearance for transactions such as rewarding shareholders, and has struggled through stress assessments required for banks, which is another reason to be wary of investing in it.
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