Every thought about personal finance I've ever had, as concisely as possible
You say you don&#x27;t like hold inflation and then suggest 20% cash levels...hold no cash.<p>Also, and this is something that I have say every time these days: hold more quality stocks, and diversify geographically.<p>The mistake with not holding quality stocks is a weird one. I worked in financial advice (research, not an adviser), and there was this adviser who was 20-30% in EM stocks...the logic being back then (in ~2012, before EMs really started underperforming) that you want to own volatile stuff because volatile stuff outperforms in the LT. Now this isn&#x27;t true, I knew this wasn&#x27;t true then but people automatically think that volatility=returns. It doesn&#x27;t, the opposite is true. Volatile, high-beta stuff will underperform. The point of my example is that even people who should know better don&#x27;t know this.<p>Everyone owns too much US tech. If you are 100% equity and leverage constrained then geographic diversification is a genuine free lunch. Maybe we are seeing some secular change in equity ownership akin to the financialisation of savings in the 80&#x2F;90s...we are not...and even if we are, you can own other countries going through the same change, no reduction in upside, more diversification.<p>Also, you should consider options. No need to do anything crazy like selling options but volatility is, generally, pretty cheap and a way to reduce your downside without reducing upside (in fact, you have actually been paid to reduce risk...people really love picking up quarters in front of steamrollers...let&#x27;s assume this won&#x27;t continue though). This isn&#x27;t for everyone though, some people don&#x27;t care about volatility, and this strategy is only very profitable if you can lever up your beta (although I know a fund that finished the year up 20% unlevered, running zero market risk because they had a put-buying strategy). There are very few ways to reduce risk in this environment, options is one (bonds are another, you need to go quite far out to hedge out equity properly though).<p>Also, the long-term real return from stocks is ~300bps. I think you say 6-7%, that is really best-case imo (it is not self-evident, to me at least, that the US just hockey-sticks forever).