bonzai wrote: ↑
Thu Jun 21, 2018 9:02 am
The asset allocation I am interested in is 100% equity....
You say you have no experience so you cannot possibly know what it will feel like for your (let's call it) $1 million to shrink to about $500k over 6 months or so and stay in that neighborhood for a year or so.
It is devastating. Many call it "gut wrenching". It can gnaw at you day and night.
You think you can gut it out. No big deal. Many people do think that. It can't be that bad.
Well, yes it can be that bad and worse. A gut wrench that goes on day after day for month after month takes a toll on a person and all the relationships that person has. Happiness and health are affected. Families are affected. Marriages are affected. Work life suffers. And all of this is unnecessary because you have absolutely no need
to invest your money at 100% stocks.
You should consider your need
to take risk. It is probably very low because this amount of money puts you way ahead or wherever you actually need to have saved at this point in your life.
You should consider your ability
to take risk - something we know nothing about because all we know is you don't need it for 10 years.
Very lastly, you should consider your willingness
to take risk. Your willingness seems high, but I think that is really just a lack of experience talking. It seems like a walk in the park so you are willing to do it.
Here's an idea you will not like, but you should consider it anyway. Try to keep an open mind. It is actually an ideal choice for a person in your situation.
Invest now at about 60% stocks and 40% bonds. As you get experience (years, not months) you will see how the market goes up and down and what it feels like to you. If you are lucky enough to experience a real crash, when it is over you will know for sure whether 100% stocks is a good place for you to be. If it is, go there.
If there is no crash for many years, you will at least see how things work and how you react to it. You will have better judgement about what your asset allocation (stock to bond ratio) should be.
Somehow you have a nice sum to do something with. Don't get in over your head. Test the water a little and find out just how deep it is before diving in head first.
An inexperienced person jumping in with a 7 figure sum at 100% equities lack wisdom.