Amid unprecedented volatility in the stock market, Coffeehouse Investors focus on their asset allocation between stocks and bonds, to address the risk that impacts them the most.
For younger investors, the long term risk isn’t a downturn in the stock market, it is the impact of inflation on the purchasing power of your portfolio in retirement.
If you have 20 to 40 years of savings in front of you, a declining stock market allows future savings to be invested at lower levels, boosting expected future returns.
If you are getting close to retirement, or are retired, consider keeping a healthy amount of money that you are likely to draw on for living expenses over the next 6-8 years outside of the volatile stock market.
Amid these uncertain times and volatile stock market, Coffeehouse Investors embrace three simple principles:
- Don’t put all your eggs in one basket.
- There’s no such thing as a free lunch.
- Save for a rainy day.