Having come of age during a lost decade for stocks, some young adults are dubious of the markets. Nearly 20% of investors under 35 are unwilling to take any risk, a recent Investment Company Institute survey found.
The problem with an all-cash approach is that your portfolio won't keep up with inflation. "Young investors have to balance market risk and inflation risk," says Maria Bruno, senior investment analyst at Vanguard.
Instead, ease in. Putting 30% of your long-term savings in stocks is better than 0%. Eventually, that baby step may make you comfortable with a bigger stake.
Another option: Save a lot more.
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