The optimal proportion of a household's investment portfolio that should be in risky assets such as stocks depends on what proportion of total wealth, including human wealth, the investment portfolio represents. This article estimates the total wealth of households in the U.S. Survey of Consumer...

The distinction between subjective and objective risk tolerance is illustrated by expected utility analyses of portfolios. Optimal portfolios were derived for one, 5, and 20 year investment horizons for 6 major financial asset categories. The important aspects of objective risk tolerance are the...

This article uses 69 years of real rates of return for six types of financial assets to find efficient portfolios for saving for college, in terms of mean and minimum accumulations. Small stocks are in every efficient portfolio. For 10 and 15 year time frames, the portfolio that was the safest...

Effects of financial and demographic variables on risk tolerance were estimated for households with an employed respondent in the 1992 Survey of Consumer Finances. Logistic regression analysis showed that female headed households were less likely to be risk tolerant than otherwise similar...

We identify and present original analyses of four methodological issues related to using Survey of Consumer Finances (SCF) datasets and illustrate these issues with recent articles published in this journal. The issues are: recognizing that the respondent is not necessarily the household head,...

This article focuses on the effect of race and ethnicity on financial risk tolerance. Blacks and Hispanics are less likely to be willing to take some financial risk but more likely to be willing to take substantial financial risk than Whites, after controlling for the effects of other variables....

This study examines the effect of age on risk tolerance. The life-cycle investment hypothesis is tested using the 1983-89 panel of the Survey of Consumer Finances. Household wealth is defined as the sum of human capital and net worth. Risk tolerance is measured by the ratio of risky assets to...

Effects of financial and demographic variables on risk tolerance were estimated for households with an employed respondent in the 1992 Survey of Consumer Finances. Logistic regression analysis showed that female headed households were less likely to be risk tolerant than otherwise similar...

How much should a family save for retirement? A prescriptive life cycle savings model is presented. Scenarios are developed with simulations to provide implications for personal financial planning. The percent of income to save today depends on the expected lifetime non-investment income...