Or perhaps not. You don't want to retire at a moment when the retirement fund is down 20% and decides to pay no interest on your savings for the next 10 years. Or not pay you at all.

It doesn't really matter. 20% down from peak after 30 years of growth is going to be far over your book value.

The Dotcom Bubble isn't coming back for 20%. It's coming back for everything.

Isn't this precisely what target date funds are for?

they don't solve anything, because the market can still be down at the moment when they move your wealth to a less variable market.

There is, but the presumption in that argument is that those risky bets bring higher returns. If that assumption is invalid, the argument falls apart. (I'm not especially confident myself that private credit can actually bring higher returns over a long time horizon.)

I swear to god, people use "high risk bet" as synonym for "sure gain with no danger". You see it on HN all the time.

The defining thing about "high risk" is that risk part will happen and that creates a lot of loosers. That is the whole point!

But HN treats "high risk" as something that is expected to always give you reward.

russian roulette?

Its high risk no gain game. Kind of opposite.

All I'm getting at is that EV matters. Putting a bunch of chips on the roulette table has high risk, but negative EV -- it's a terrible investment. Loading up on risk is not inherently EV-positive.

Then again, when you look at the performance of your typical pension fund or university endowment, and then see the actual incentives of the people managing the money (as there's ultimately managers there looking for their personal best interests), then you see that said argument one could make is not exactly going to do well empirically.

The main reason we are seeing private equity now being offered in 401ks isn't that it's going to be great returns for your average mostly-self-directed worker, but because those managing private equity believe they will make more money if they managed more capital. There's no guarantee that they are making any choices there that provide good risk-adjusted returns. But the managers sure would be making more on fees.

No, these are who should make conservative slow raise, be sure not to crash bets. Cause when they crash, whole lot of people suffer.

They should impoverish their retirees by like 10x in order to avoid having a distribution of retirement results in the 8-12x range? Conservative investments lag even the worst-case equity investment result over any significant, retirement-relevant time range.

High risk investment by normal pension fund is still super conservative compared to risk traders.