Are you willing and able to stick with your current equity exposure through the next bear market?
That is one of the most crucial questions retirees should be asking themselves right now. If your answer is no, then you should take the opportunity now—with the stock market close to all-time highs—to reduce your stockholdings. Don’t wait until the bottom of the next bear market to discover that you don’t have what it takes.
There’s no shame in admitting you don’t have the discipline. Claude Erb, a former fixed-income and commodities manager at mutual-fund firm TCW Group, once told me that “the people who can truly stomach the volatility of a 100% stock portfolio are either catatonic or dead.”
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