Re:Dow plunges 1000 points
by twblalock on Monday February 05, 2018 @05:52PM
(#16312987)
Smart investors should have an asset allocation that reflects their risk tolerance.
If your allocation is based on your tolerance for risk, you won't need to change it when the market crashes or booms -- such an allocation is based on the risk characteristics of the assets over the long term, not their current performance.
The time to change such an allocation is when your risk tolerance changes, e.g. as you get closer to retirement you will probably start to prioritize preservation of wealth over growth.
If your allocation is based on your tolerance for risk, you won't need to change it when the market crashes or booms -- such an allocation is based on the risk characteristics of the assets over the long term, not their current performance.
The time to change such an allocation is when your risk tolerance changes, e.g. as you get closer to retirement you will probably start to prioritize preservation of wealth over growth.