There really is no free ride. If you want on average returns above inflation over long term, equities. But with reward comes risk, and volatility.
There are a few ways to hedge these risks, but at the expense of probable long term (think 30 years +) rewards.
1. Have some % in bonds. The larger the %, the smoother the ride.
Having say 4 or 5 years withdrawals in bonds allows you to live post big equity drop without selling at the bottom, plus the act of rebalancing the ratio will hopefully tend you towards buying low and accumulating high.
2. Diversify beyond pure sp500
typically think of adding a %
- international stock
- broader market
- real estate (owning, renting, REITs)
- commodities
- super tulips (ie gold)
But sitting on the sidelines without a plan, esp wrt asset allocation, is THE rookie error, resulting in a tendancy to buy high, sell low, and then staying in cash until just before the next dip, (repeat)