For the past few years there has always been a reason to be in cash. Yet doing that would have resulted in significant lost returns...all to avoid a paper loss.
Exactly. What people like marty998 don't realize, is
there's always a reason to be in cash. No matter what year you pick, if you put yourself in the shoes of someone from that year, and likely find a reason to keep your money in cash.
Seriously, go through IndexView:
http://thume.ca/indexView/Put in any two years.
Then put in two different years.
Then two different years again.
You'll see, no matter which years you put in,
it looks like ***OMG A CRASH IS COMING***, because the line is so much up and diagonal to the right, it looks like it has no where to go but down! This year is no different,
Had you sold it all every year it looked like a crash was coming...you'd never be in the market. Let's not argue about whether a crash is coming or not, let's agree that
it feels that way right now. Like there's been a turning point, a division between an old era and a new era, and therefore past history is no longer a guide to the future.
And here's my point:
it always feels that way. That's always what it feels like. It's not a number, it's a sense that there's been a break, the ground has shifted, the rules have changed.
This is why it's so hard to stay the course. Your investment plan needs to be in tune with your own personal willingness to take financial risk. When you're deciding what your risk tolerance is, it's not a tolerance for the number 10 or the number 15 or the number 25. It's not a tolerance for an "A" turning into a "+". It's a tolerance for accepting genuinely-scary, nothing-like-this-has-ever-happened-before,
heralds-a-new-era news events.
We are all watching marty998 fail this test in real-time, and stocks are at record highs! Remember what this looks like from the outside, if you find yourself having similar thoughts when real market volatility actually shows up.
Volatility is only temporary, but you can permanently cripple your portfolio trying to avoid it.