Joined: 22/03/2018(UTC)
Posts: 1,308
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bearcub;300474 wrote:D Bergman;300381 wrote:SF100;300379 wrote:smg8;300365 wrote:Anyone with a reasonable investment horizon is going to see ups and downs, market crashes, etc etc. Best to keep calm and carry on. What if you were born in 1952, like the OP, presumably? Some of us are even older! We all have memories - either directly or second hand - of events. I personally remember the effects of the 1970s inflation and recession, but I've always had in the back of my mind my mother's stories about the Wall Street crash of '29 and the Depression that followed. It's probably made me more cautious as a result, especially as I can no longer earn my way out of losses. I guess there are a few ways to mitigate that. One would be to hold fewer equities and more of something "safer" – whatever you perceive as safer, whether bonds, prefs, property, gold or whatever. The so called "flight to safety", but the risk is that the perceived safer assets turn out not to be in a really serious depression. Another would be to look at the risk of a lost decade due to a repeat of 1929, and deal with that by holding 10 years' worth of cash in fixed rate bonds/ high interest accounts, on the basis that it could take a decade for prices to recover. For those with a big portfolio, maybe that isn't so daft, as you retain the upside of potential gains from staying 80 or 90% equities – but also have the downside protection of holding 10 or 20% cash, which will cover living expenses for a few years. Ultimately, giving up some potential upside in return for being able to sleep soundly at night is a sensible way to go. I heard second hand about my great-grandfather's anxieties when shares and IT's dropped in the 1930's (he died in 1942, by which time I assume they'd recovered some of their value); and I watched my father's reaction to Northern Rock going down. In that case, holding savings accounts caused him just as much worry as a stock market crash. Oh dear, you really are a cub. Your great grandfather was around for the 1929 crash; one of mine fled Russia as a child during the Crimean War. I have always kept a "prudent" amount of cash/bonds, and after retirement this was increased to about 3 years' expenditure, which mitigates the worry about the stock markets.
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