Beginner Investing/Market Crash


Hi Paul,

How are you? My name is Russ. I am new to investing. I have an individual investment account (stocks, mutual funds, bonds), a Rollover IRA (all invested in the S&P 500), a Roth IRA (invested in a growth fund) and a 401K; also have a nice chunk of cash in a money market. I am 37 and am about 85% in domestic stocks and 15% in bonds...trying to be aggressive as possible since i feel like i still dont have enough in retirement for a guy my age, but also want to protect myself from another market crash. I would be curious to get your feedback on this.  Would appreciate any pointers.  Thanks for your help and time



  Thank you for your question!
Unfortunately there is no real way to protect your self from a market crash AND be fairly aggressive.  I agree that at your age a more aggressive approach will yield a larger portfolio in the long run.
  It is really a question of stock vs bond allocation. A very common way to approach this is to take 100 and subtract your age to get the percentage you should be in stocks. For example, in your case this would mean 63% stocks, and 37% bonds as an average level of risk. So you are on the aggressive side.
  It does not have to be static. For example, when markets are at all time highs, you could increase your bond allocation and decrease the amount in stocks. When markets pull back, reverse it.
  The goal there however would be to NOT fall into the trap that most investors do, and get caught up in strong markets. Greed makes many investors buy more at market highs when they see strong returns over the past year, and start thinking "I should have had that".
  I like to remind everyone I can that the goal is to grow your investments. If you take a more cautious stance and underperform the markets, DO NOT worry about it. If you are positive, then you have more funds than before, and its a great thing.
   At 37 years old, there is plenty of time for your portfolio to recover is there is a market crash. However, to minimize the effects you could pull back on your stocks and increase your bonds when the market is at all time highs. You are currently very aggressive.

I hope this helps, please do not hesitate to follow up with me if I can offer anything additional.

Best Regards,

Paul Henneman
ValuEngine Inc

Beginner Investing

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Paul Henneman


I can answer any questions on investment strategies. Specifically, my expertise lies in long term investment strategies designed to beat market performance while reducing risk. Not get rich quick schemes, but solid investing strategies. DO NOT SEND ME YOUR HOME WORK QUESTIONS! Over one half of the questions I receive are clearly students in finance or economic classes asking for answers to their homework questions. Most of these come from India. I won't answer them, do your own work. However, I welcome all investors trying to negotiate how to invest in stocks, mutual funds, ETF's, and other investments.


15 years in a leadership role at a financial research company. We sell research to institutions such as Wells Fargo, Fidelity, Thomson Reuters, Bloomberg, Bank of NY, Scotia Bank, and others.

Florida International University, University of Florida

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