I just heard another sad story about someone who lost a lot of their nest egg during the Great Recession and can’t retire until they are 70 years old. This individual is now 60 and trying to figure out how to slow down and still maintain a sufficient salary to meet their goals. This situation likely occurred from either panicking in the middle of a market crash and cashing out or investing in risky assets. Stories like these still strike fear into the hearts of many americans as the doom and gloom mantra dominates the mainstream media headlines in this record setting bull market.
Yes another recession is coming, but we don’t know when. The best thing to do is have a reasonable investment plan and sticking with it. It doesn’t have to be the best plan or a perfect plan, just a reasonable one. An example of an unreasonable investment plan is having 75% of your portfolio in cryptocurrency, gold , marijuana stocks, junk bonds or any other volatile security or market sector. A reasonable investment plan is having a diversified balanced portfolio of stocks and bonds. It doesn’t matter if you want to be in a 100% diversified stock portfolio or 100% diversified bond portfolio. If that is where your risk tolerance lies and if that’s the only way you can sleep well at night then that’s a reasonable investment plan. The real question is not how many portfolios out three are actually better than yours, but how many are worse. If there are a great many portfolios worse than yours then chances are you are in a reasonable portfolio.