We cannot possibly predict the future of inflation, Fed rates, savings rates, or the impact of current and future world events upon the economy. As well, while we all aspire to buy low and sell high; we truly have no clue when a stock or fund has ascended to its peak or descended to the bottom of the trough. What we do have control over (as a few wise DA contributors have noted) is diversification of our money. While each of us needs to have several months in emergency savings and the ability to live within a monthly budget; diversification will not look the same for every investor. It will depend one's family's particular resources, risk tolerance, and personal/family financial goals. In my case, my wife and I have about five months of emergency savings, and have transferred some of our growth fund investments to less risky options (utility funds, bond funds, fixed income investments) to help mitigate against downside risk. What are your thoughts about the strategy of diversification, and if it is something you view favorably, what does diversification look like for you and your family?
