invest in the first place, then make better financial decisions such as choosing mutual funds with low fees. They also avoid high-cost borrowing, such as taking out payday loans or carrying credit card balances, and they are wary of incurring other financial costs, such as high bank fees.
2. Older people have more control over their emotions. They are less likely to buy at the top, then panic and sell at the bottom. They are more skeptical about jumping on the latest investment trend or buying on a hot tip, which is almost always a mistake. Older people are less likely to get sucked into a financial bubble that is about to burst. Who suffered the most during the housing bubble of the late 2000s? Not retirees, but first-time buyers.
3. They are better at avoiding irrelevant information. Most older investors have the ability to tune out the noise from CNBC and other financial media, which focuses too much attention on the news of the day, especially when the news is not even that relevant to your investments. The latest pronouncement from the Fed or impasse in Washington can get everyone excited, but older investors know that while today is stormy, the sun may come out tomorrow or vice versa.
4. Older investors have a sense of their own limitations. Young people can be cocky, overconfident and convinced they are always right. Their older brethren have gone through some bitter experiences, and know that sometimes forecasts don't pan out. And there is no more important quality in a good investor than a bit of humility. Experienced investors know the frustration of hoping that a losing investment will somehow make a comeback, when all the evidence says it will not. They have the discipline to take a small loss now rather than wait around for a complete catastrophe.
5. Seniors are more patient. They are more able to weather the ups and downs of the market, without panicking and changing their minds with every twist of the financial wind. Younger people who can process information more quickly may make better day traders, but day traders almost always lose money. People who are slowly building up wealth over time in a considered and strategic way know that the experience and accumulated knowledge of a seasoned investor will win out in the end.
Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement and other concerns of baby boomers who realize that somehow they have grown up.
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