Should we ride out this market?
Hi Terry! I’m 61 and my wife is 62. We have 725K saved for retirement, 60% in Equity funds and about 40% in savings and money market funds. We are planning on retiring when we reach 65, we both have good jobs and I wanted to know if we should ride this crazy market out? Or is there some changes we should make to out investment allocation? We already have lost about 80K in this market and I would like to limit further loss. Thanks in advance!
Terry Says
That all depends on your risk tolerance. If you’re upset now, you’d be triply upset in a typical bear market that takes the averages down as much as50%.
But you have 40 percent in cash as a cushion. Is it really in government securities money market funds? That’s safe. Or is it in bonds? That’s dangerous!
There’s an old saying: Sell down to the sleeping point! Maybe another 10% in cash would make you sleep better? There will still be losses in a bear market –but you don’t have to panic if you have enough cash. And you have 30 years of life left — so you need the long-term inflation protection given by large company stocks.
