I've been in the market for years, 36 years in fact,,
One significant underappreciated risk I see for investors my age is time.
Not volatility, or inflation but recovery time.
If an average bear cycle lasts 18 months, and that coincides with when you start drawing on your retirement funds, the math changes.
Same average long-term returns, but completely different outcomes.
This is the thing that should keep you up at night not the market level itself, but when the bad years arrive relative to when you start drawing down.
Why this dangerous right now..
Buy and hold, advice is great for a 35-year-old, with years left to recover, but for someone 5 years from retirement, it can be portfolio-ending.
In fact I believe that active portfolio management is actually more critical in the years approaching retirement.
With more than 3 decades, I've weathered several gut wrenching corrections, and still kept to my strategies, it worked out well.
What I've actually been doing now is seeking out more 3-6 month, get in get out opportunities.
Not changing my strategies, just my time frame..
Recent market conditions have actually been great for this.
Thoughts?