Very helpful, and good reminder about the ongoing nature of the process.
I agree the it can be a bit confusing at first. I like to think of stock market risk in the following terms:
With my current AA, if there is a 50% decline in the S&P500 that lasts several years, which coincides with a major recession:
- do I have the fortitude to avoid panic selling? (willingness)
- is my job stable enough or do I have enough savings to wait it out? (ability)
If the answer is "no" to either question, I should adjust my AA to be more conservative. But I need to be mindful of how adjusting my AA may potentially impact my retirement and other financial goals (need).
Statistics: Posted by TellMeMore — Wed Oct 02, 2024 7:42 pm — Replies 25 — Views 1298