Context: mid 40’s, self-employed, homeowner.
I’m very financially literate, but took my (investing) toys away years ago when I proved to myself I wasn’t beating the market.
I now invest primary through Wealthfront, and at the start of the year my risk was set at 10/10. I’ve been steadily ratcheting it down as things get more and more uncertain, and I’m now at 2.5/10 risk.
My concern is that the standard financial return modeling used by tools such as Wealthfront may not cover the situation we are facing here in the US. For example, as I take “risk” down, domestic bonds goes up, and foreign equity allocation is going down. I’m not sure I agree with that as an effective strategy to deal with an isolated US. As a homeowner, I’m already very exposed to the US economy, so this feels like it’s concentrating risk rather than moving to a lower risk profile.
Thoughts?