ziggy29
Moderator Emeritus
Only if you think people have to opt for "100% sure thing" or "100% riskier thing." But I would tend to reject that idea; there's something to be said for assuming *some* risk while also seeking preservation of capital with some of it as well. Isn't that the idea behind asset allocation?I agree, it is a personal decision - no right/wrong about it.
However - I seem to find an inconsistency among people who choose the 'sure thing' side. I think that many of them have no problem having some money invested in stocks while they are in the process of paying off their mortgage.
But, doesn't that 'sure thing' view really say that you should not have a single penny invested in stocks until the mortgage is eliminated?
You can view "spreading out" extra cash flow into both "sure things" and higher risk/return investments as a form of asset allocation, can you not?
In that sense, wouldn't using half of a windfall to pay down a mortgage and half to invest be like having a 50/50 asset allocation? Is someone who chooses a 50/50 asset allocation being "inconsistent" because they aren't putting ALL of it into the market or into the "sure thing?"