Who Among the Elderly Owns Stocks? The Role of Cognitive Ability and Bequest Motive
Journal of Family and Economic Issues, SpringerLink, 2012
27 Pages Posted: 20 Feb 2012 Last revised: 8 Aug 2019
Date Written: January 25, 2012
Conventional advice is to reduce risky investments as one ages. Such a generalized focus on risk avoidance may be inappropriate for elderly with longer life spans and those with financial goals that extend beyond their lifetime. To better understand risky asset holdings among the elderly, we investigated the effect of cognitive ability and bequest motive on stock ownership and stock purchase. Using the 2004 wave of the Health and Retirement Study, we found that one-third of elderly households held stocks and 36% of those elderly stockowners had recently acquired stocks. The respondent’s cognitive ability and bequest motive were strongly related to stock ownership. Among those who owned stock, a bequest motive was positively related to a recent purchase of stocks.
Keywords: Elderly, Stock ownership, Cognitive ability, Bequest motive
JEL Classification: D14, G11, J26
Suggested Citation: Suggested Citation