Develop Risk Tolerance. A lot of people consider volatility a risk. I don't think that is true. Although I'm a strong believer in mark-to-market accounting, which can be a real hay-ride, I don't consider volatility to be a risk. A true risk is something like naked call writing or using LTCM-sized leverage. Leveraged ETFs are not the same as the widely accepted leverage of buying a $1M house with only $30k down. True risk is retirement-threatening underperformance for the sake of reduced volatility. Volatility is relative; there is no universal definition of 'high volatility'.
I would have to agree about risk. My exposure to the market has almost made me immune to it as well. The underperformance can sometimes be attributed to too much risk, but too often it is because there wasn't enough risk
Develop Risk Tolerance. A lot of people consider volatility a risk. I don't think that is true. Although I'm a strong believer in mark-to-market accounting, which can be a real hay-ride, I don't consider volatility to be a risk. A true risk is something like naked call writing or using LTCM-sized leverage. Leveraged ETFs are not the same as the widely accepted leverage of buying a $1M house with only $30k down. True risk is retirement-threatening underperformance for the sake of reduced volatility. Volatility is relative; there is no universal definition of 'high volatility'.
I would have to agree about risk. My exposure to the market has almost made me immune to it as well. The underperformance can sometimes be attributed to too much risk, but too often it is because there wasn't enough risk