For a while, many financial advisers have been telling young investors to allocate most of their money--usually 401(k) money--to stocks. The idea: With decades of tax-free growth ahead, compound interest can work its magic and market dips won't matter over such a long period of time. Some even go as far as to recommend a 100 percent stock portfolio [read more about mine here.]
But lately, a growing chorus of financial gurus--including Andrew Lo, director of MIT's Laboratory for Financial Engineering--are saying the all-stock plan isn't the best idea going forward (Lo believes that portfolios need more asset classes than just stocks and bonds.)
Recently, I asked two financial advisers for their thoughts on the 100 percent stock portfolio.