Alright thanks for the in-depth response, got a few things to explain:
1. Stagnation is a missed opportunity, but it's not a risky one. I am happy with cash in the bank knowing that it might not be earning as much as stocks, or anything else, because it's still fundamentally cash. $10k is still 10K and it's still worth a lot (even if exactly what it buys changes slightly), baring massive changes what 10k can buy me today and next year is pretty similar, so I'm venturing nothing but an opportunity to risk the money. Which in my way of seeing the world, is less risky.
Yes, definitely, cash from one year to the next is pretty safe (banks can fail too, but hopefully unlikely).
However, once you factor in time, and the missed opportunity from many years of compounding returns offered by growth assets, then the difference in returns between asset classes increases.
Not sure if you've seen this graph but it's worth a look.https://static.vgcontent.info/crp/intl/auw/docs/resources/index_chart.pdf?utm_source=IndexChart&utm_medium=LandingPage&utm_campaign=Ret2016&utm_content=Ret
Of course, if you are wanting to buy a house in 5-10 years, one key thing you may not have is time to smooth out the dips.
But you sound like you know what your doing and if having 50/50 defensive/growth is what helps you sleep at night, then you should do it. Preferably with scheduled rebalancing.
2. If I invested 10k and the price halved I wouldn't be happy. If I invested 10k and I got 5% return instead of 10% return because of a more conservative portfolio I'd be happy.
A broad based 50% decline is pretty rare, and dollar cost averaging would allow you to even profit from such an event, assuming you have additional funds at hand and ample time to recover.
But one thing to consider is the way the amount of time you are invested, and compounding returns over that period, can affect the way you think of your investments. Over time, the longer you are invested and the more time you've had for compounding to work, the more sanguine you become about falls in your portfolio value. At least that's my relatively limited experience i.e. What's to worry about a 5% decline in a day, if you're up over 50% from when you bought in?
Growth in your portfolio also reaches a point where the (paper) losses that you suffer in a day exceed how much you could have saved in a year. And then the real big falls, the ones that we all dread, the 50% decline like the GFC, are of course the ones that in hindsight turn out be once in a generation buying opportunities.
This somewhat laid back approach to volatility is predicated on having time to let your investments do their work. If you have a specific timeframe where you want to shift your investments into a property, and that was non-negotiable, I'd be inclined to keep more of it as cash too.