Quote:
Originally Posted by RunKC
That’s what I thought, but here’s my thing. If the S&P crashes and goes down the tubes by 50% aren’t we all screwed no matter what? Your managed fund is going down with it.
Sure you’ve got some bonds and a few international assets, but A large portion of my target fund is in stocks.
December is a great case study. It was the worst performance in a decade. The S&P went from 2,924 to 2,4447 (16.25% drop). Hell my target fund dropped more! It went down 17%!
I guess that’s why I’m such a big fan of this possibility. We went though hell after 9/11, 2008 and as recently as last December and it always bounces back stronger every single time. In almost 100 years, the S&P has done nothing but go up.
Meanwhile my target fund barely moves.
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Portfolio diversification is a tried and true approach. If you're young and want to throw out widely-accepted recommendations and go all-in on stocks, go for it - you might get lucky. But no serious financial advisor would ever suggest that in the long-term.