I was talking with my dad last night, and he told me that he had shifted dramatically towards equities, for essentially the same reasons that I've espoused here. He's 57.
I have to admit I puckered up a little at the thought of him being mostly in equities. I had a hard time arguing against the same logic that I had been advocating here though
His thinking is actually more extreme than mine, since he feels that the official inflation stats understate inflation dramatically (let's skip that debate here though. We can just use the search function)
On the plus side, both he and my stepmother will have substantial pensions, so they'll be ok even if the market crashes again.
Originally Posted by jebmke
Yes, that is the dilemma. Could be a long slog before things turn around. Probably still have another 15-20% of housing value to shed before anything happens upside. I made a high stakes move to small cap in the 80s that paid off so I don't need to take the risk now.
Otherwise, I'd be more inclined to take more of a risk in equity at this stage. My big fear is Europe. They can figure it out eventually but my experience from living over there is that they take their time working out solutions that everyone can live with. If the sand runs out on the clock before they come up with a solution then we are cooked. Austerity will not cut it. It will take them a while to figure that out but they will get there eventually.
If I were just starting out, I'd be almost all-in. This feels a lot like the late 70s (minus the inflation, plus the over-valued housing).