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Started by Money Ronin, October 29, 2018, 06:13:19 PM
Quote from: polama on October 30, 2018, 02:18:54 PMHow bad at re-allocating your portfolio?If you're going to set one mix and ride it for the next 30 years until you need the money, I'd go more conservative if anything. Completely defensible to say "100% stock, I've got a very long horizon", IF you're going to pull back as the horizon gets closer.People will have different opinions, but I think if you can commit to reevaluating your allocation every 5-10 years it's fine.
Quote from: Sam on November 01, 2018, 05:48:30 AMThere is actually an efficient frontier to consider when investing. Check it out: https://www.financialsamurai.com/investment-strategies-for-retirement-based-on-modern-portfolio-theory/You will eventually get to a point of your life where the AMOUNT you invest will no longer feel comfortable getting fully exposed to stock market sequence risk.For example, let's say you have $100,000 in stocks. You don't really care about losing $20,000 because you're making $70,000 a year and can easily make up for it.But let's say you grow your portfolio to $1,000,000. You have a family to provide and you're making $200,000 all-in. If you lose $200,000 in stocks, you will feel extremely stressed because your $200,000 is only about $150,000 after tax.And if your stock portfolio grows to $5,000,000, there's no reason to risk it all because you have an amount that allows you to never have to go back to work again.