After setting up an AA that was comfortable for me, I adopted the Alfred E. Neuman attitude of "What, me worry?" .Here's the trick.
Pick an Asset Allocation that you can hold for 5-10 years if the market crashes next week.
Because it might.
This is always true.
If you're young with a stable job or skills that will easily let you find a new job if necessary, that Asset Allocation might be 100% stocks (with an emergency fund). Because you have the long run, so you're not worried about a crash next week.
If you're near retirement, a more conservative allocation is probably wise. Maybe 70/30 or 50/50. Because if you might need to pull money from your retirement funds to pay bills, so you need at least SOME money in safer assets. Hopefully enough to last until the market recovers (don't assume it will recover in 1-2 years, there have been much longer bear markets in the past).
Once you have an Asset Allocation that you feel comfortable that you can hold through the next crash, you no longer have to worry about the next crash. You don't have to time anything correctly.
Statistics: Posted by CRC_Volunteer — Sat Jun 22, 2024 9:20 am