From:
Are Stocks Really Less Volatile in the Long Run?
LUBO ˇ S Pˇ ASTOR and ROBERT F. STAMBAUGH ´ *

"The long-run volatility of stocks is of substantial interest to investors. Evidence of lower long horizon variance is cited in support of higher equity allocations for long-run investors.

Our empirical results indicate that stocks should be viewed by investors as more volatile at long horizons. Once uncertainty about the parameters and conditional expected return is recognized, however, the same
investors find the typical glide path significantly less appealing.

Investors with sufficiently long
horizons instead prefer glide paths whose initial as well as final stock allocations are substantially
lower than those of investors with shorter horizons."

Exactly! Once UNCERTAINTY comes into play investors have LESS risk tolerance, not more. Not to recognize that is to not understand human behavior.