03-12-2020, 09:12 AM
(03-11-2020, 05:12 PM)MikeWa Wrote: I've heard a theory that you should invest 30% of your cash with a 10% drop, next 30% after next 10% drop and another 30% after yet another 10% drop.
Nothing wrong with that plan for an extended bear market. You have to consider your age, your personal risk tolerance,a and your best guess where we are in the business cycle. It's easy to over think it.
I don't think a young investor should have much cash. It's a lost opportunity longterm. Practically zero coming out of the bear, 10% if the bull is years old and valuations stretched. It really stinks to have no money when the market gets crushed. I'm close to retirement. I'll push my luck some at a time like this, but it would be nuts for me to not have enough cash for the first few years of retirement should I need it. I want 4-5 years to ride out a beat down so my stocks can recover. That is usually more than sufficient time.