How do you handle situations like this? I’m not sure—of course, it depends on the person, right? Thanks :)
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@value_virtuoso_3073 It’s always about probabilities: whether a crash is coming, when it will come, and how severe it will be. I think it’s a mistake to completely liquidate everything right now. But I would start taking a slightly more defensive stance—I’d start doing that gradually.
For me, that means: about 10% cash right now (I’m usually fully invested), 6–8% gold (until recently, I had almost no gold at all), and about 50% in ETFs in my long-term portfolio. This isn’t a recommendation—it’s just my approach. For some, this is still far too aggressive; others think I’m just giving away potential returns. As I wrote: It’s all about probabilities.
For me, that means: about 10% cash right now (I’m usually fully invested), 6–8% gold (until recently, I had almost no gold at all), and about 50% in ETFs in my long-term portfolio. This isn’t a recommendation—it’s just my approach. For some, this is still far too aggressive; others think I’m just giving away potential returns. As I wrote: It’s all about probabilities.
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@value_virtuoso_3073 Take a look at trend-following strategies and their long-term charts. They often don’t perform any better than B&H, but the performance curves are much smoother. It’s a matter of temperament.
For example, I know that I have no problem with a 20% loss, but anything above that makes me nervous and sometimes leads me to make bad decisions. So I have a mix of strategies that, with a high degree of probability, won’t result in a loss of more than 20% for my portfolio.
There’s no one-size-fits-all answer to the question of how to position oneself when the strategies are constantly adjusting their allocations to the market situation.
For example, I know that I have no problem with a 20% loss, but anything above that makes me nervous and sometimes leads me to make bad decisions. So I have a mix of strategies that, with a high degree of probability, won’t result in a loss of more than 20% for my portfolio.
There’s no one-size-fits-all answer to the question of how to position oneself when the strategies are constantly adjusting their allocations to the market situation.
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