Who Swoops in When There’s Blood in the Streets?

By
E.J. Smith - Your Survival Guy
-
By Halfpoint @ Adobe Stock

Your Survival Guy can’t stop thinking about the recent opinion piece by former President of Fidelity Investments, Robert Pozen. In it, he recommends a portfolio allocation of 90% stocks and 10% bonds for those with investable assets over one million dollars or for those who don’t need the money to make ends meet.

Your Survival Guy’s opinion is that Mr. Pozen probably hasn’t spent much time speaking on the phone to this group during market crashes. I have. I can tell you one million dollars isn’t what it used to be, and nobody, even those who don’t “need” the money, likes losing money.

Pozen isn’t alone in being a big believer in overweighting stocks in a portfolio. Warren Buffett is another who comes to mind. But while Buffett and perhaps Pozen swoop in while there’s blood in the streets, Your Survival Guy’s conversations with Mom and Pop on Main Street are far less opportunistic.

Mom and Pop are less invested in the “bargain hunting” and simply want to “sleep well” at night. Thankfully, a good chunk of their money in bonds has historically been that pillow-like cushion to rest upon.

Mom and Pop, unlike Buffett, don’t “do money” for a living. They aren’t even inclined to think about money or investing. It’s not what makes them tick. Some may get interested for a time, mostly during bull markets, but they can lose interest fast when markets stagnate or stay down for what may feel like a lifetime.

Action Line: Sometimes riding out the storm is best done by staying put in a safe harbor, not betting the ranch on the market. Not every fight is worth fighting, especially when Mr. Market turns against you. Don’t get into a fight alone. Email me at ejsmith@yoursurvivalguy.com when you need backup.

I’ve offered plenty to think about here:

Originally posted on Your Survival Guy.