So the thing with EF as an income replacement fund, is that bad bear markets often, though not always, coincide with bad job markets. So you may lose 20-50% of your investments, lose your job *and* have a hard time finding a new job - and if you do, it may be at a lower salary.
Psychologically, it can be very hard to have to sell investments when they are down so much. I know that was my issue during COVID. I was scared I'd lose my job, and decided to sell some stocks to replenish my non-existent cash position. Helped me sleep at night, but I did lose money, and it was a hard choice to make.
See 2008-2011. See also 2022. I know it wasn't too bad, it wasn't long, but we saw a lot of posts from people who'd had FOMO in 2021 and couldn't hold. The job market held, though, except in some sectors, especially tech.
Now 2 years may or may not be too much for you - the question is how much you need to sleep at night.
Psychologically, it can be very hard to have to sell investments when they are down so much. I know that was my issue during COVID. I was scared I'd lose my job, and decided to sell some stocks to replenish my non-existent cash position. Helped me sleep at night, but I did lose money, and it was a hard choice to make.
See 2008-2011. See also 2022. I know it wasn't too bad, it wasn't long, but we saw a lot of posts from people who'd had FOMO in 2021 and couldn't hold. The job market held, though, except in some sectors, especially tech.
Now 2 years may or may not be too much for you - the question is how much you need to sleep at night.
Statistics: Posted by pasadena — Sun Jul 07, 2024 10:29 am — Replies 11 — Views 929