Problem
A 25-year old's recommendation would involve taking more risk than a 60-year-old. A 25-year-old would be recommended to invest in more stocks which is high risk but also high reward. You would also recommend the younger person to invest in mutual funds as well. Like stocks mutual funds are also high-risk high reward. Because the 25-year-old is trying to build their wealth at this point in their life, investing in high risks high rewards investments like stocks and mutual funds, will give them better chance in the long run. For a 60-year-old you would go the opposite way. As a 60-year-old you are either retired or preparing for retirement and will want to maintain the lifestyle that you are currently enjoying. As you get older you tend to take less risk. As a 60-year-old you would invest in bonds and annuities. Both bonds and annuities both are low risk and low rewards. By investing in bonds and annuities you can still invest your money but the return would not be as great and you have less of a chance of taking a loss. Do you agree with this response or disagree and why?