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vssrio23 posted:"Higher risk level" is a cool catch phrase until an investment in an equity-based mutual fund loses over 35% of its value within a year. Impossible, right? What are you basing this "inevitable crash" off of?
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Jun 29, 2014 00:41
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| # ¿ May 10, 2024 12:11 |
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vssrio23 posted:The point behind have a cash reserve is that it will allow you a buying opportunity for equities that are trading at a steep discount immediately following a crash. Simply keeping a long position on every equity you own with no regard for the general price of the market is a sure way to lose money. The proposition that equities will always go up no matter the time or economic environment is a smug disregard for the maxim that past returns do not indicate future performance. That depends on the equity you own... If you bought an s&p 500 etf and kept it for 10 years, you generally would be high (assuming you don't buy high and sell low). vssrio23 posted:You can sit there self-assured that you can in no way do anything to prepare for an adverse market correction or you can take steps to limit your downside in the 'unlikely' event that it does happen. It lets me sleep well at night knowing that a fair amount of my investment capital isn't tied to the emotional demands of other investor's fear and greed. If it lets you sleep well knowing you can catch a few more percentage points of gain from an already over-valued equities market, don't let me dissuade you. But that's like saying "its going to rain in San Francisco one of these days". Rises and falls and especially sharp rises and falls are a given, welcome to risk in the stock market... If you're going to base your information on anything other than data then you may as well hide your money under a mattress because that is essentially what long term high cash in a mutual fund means. Jolly Green Giant fucked around with this message at 04:19 on Jun 29, 2014 |
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Jun 29, 2014 04:07
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