Reading threads here like this one viewtopic.php?f=10&t=318201 where one of the points is:
or this one viewtopic.php?f=1&t=269063&p=4308830&hi ... t#p430819560/40 is risky, 75/25 is a wiser AA given the bond environment and risk of inflation. I think a growing group of Bogleheads have already figured this out.
it looks wise to have more than 60% in stocks. And bonds are worse than in the US here in Europe where I live.
So from a wisdom, calculating point of view, having more than 60% of one's liquid wealth in stocks (vs bonds or cash) seems like a good decision, at least for the long term.
But emotionally if I were to lose say 1M$ (at least as a paper loss) from a drawdown in stocks, I would feel terrible. So should I avoid this risk by having a lower allocation to stocks? But in this case the negative yielding bonds in Europe are a slow bleed that in the long term will erode my wealth. In other words having more in bonds/cash will feel safer as I don't have the risk of having huge DD, but in the long term does not look like a wise decision.
What do you think?